The cannabis industry’s lack of banking access has created public safety concerns and social equity challenges in the rapidly growing marketplace.

That was the main takeaway from an Oct. 28 virtual briefing titled “UNSAFE Banking & Cannabis,” which was hosted by the U.S. Cannabis Council (USCC).

During the hour-long webinar, which was moderated by USCC CEO Steven Hawkins, several cannabis entrepreneurs and a security expert shared firsthand accounts of how a lack of banking services has impacted them.

Alphonso “Tucky” Blunt, CEO of Blunts + Moore in Oakland, Calif., shared details of robberies at his dispensaries and the public safety risks of the cash-only cannabis industry.

Precious Osagie-Erese, co-founder and chief operating officer of cannabis delivery and logistics company Roll Up Life, based in New Jersey, described her limited options to raise capital and the pressure to accept predatory deals in the industry.

Seun Adedeji, CEO of Elev8 Cannabis in Oregon and Massachusetts, shared his experience with seeking capital as a $50,000 start-up business in the space.

Leo Bridgewater, founder of Bridge H20 in New Jersey and director of veterans outreach for Minorities for Medical Marijuana (M4MM), discussed his efforts to secure a license in New Jersey.

And James Bauer, manager of retail compliance and corporate security for Livwell’s 21 dispensaries across Colorado, provided details of the company’s numerous burglaries and how Livwell has invested millions of dollars into security measures since it launched in 2009.

The Secure and Fair Enforcement (SAFE) Banking Act, which would provide a safe harbor for financial institutions that serve state-legal cannabis businesses, passed the U.S. House for the fifth time last month, this time as part of a defense spending package. The legislation has yet to make progress in the Senate, but the “UNSAFE Banking & Cannabis” panelists agreed that the bill would remove barriers to entry that have kept smaller and minority-owned businesses from growth, as well as eliminate some of the public safety concerns associated with an all-cash industry.

Here, Cannabis Business Times and Cannabis Dispensary round up the key takeaways from each panelist.

1. The lack of banking access harms smaller and minority-owned businesses.

Precious Osagie-Erese, Co-Founder & CEO, Roll Up Life


According to Osagie-Erese’s insights, the inability to access loans is detrimental to many social equity operators. Smaller and minority-owned companies in the industry often feel pressured to accept predatory lending deals because the lack of traditional banking services leaves them few to no other options, she said.

Osagie-Erese also shared that the cannabis industry is “capital-contingent and intensive” and that she had to work “10 times harder” than she would in other industries to get her company up and running.

“We’ve been building this company for the last four to five years,” said Osagie-Erese, who co-founded Roll Up Life with CEO Tiyahnn Bryant. “And to say that there would be challenges is an understatement. … There’s so many things that goes into building a cannabis business from the ground up, especially when you’re on a grassroots level with not that much access to capital. You have to maneuver in a way where it’s not traditional. I almost feel like I’m working backwards. I have to work 10 times harder that I would initially in order to do basic services such as accounting, such as cashflow, such as loans, such as raising capital.”

In the midst of raising capital for the past six months, Roll Up Life, and other social equity entrepreneurs, are often pigeonholed into accepting “predatory deals” because they don’t have access to loans, Osagie-Erese said. 

Although she is able to access banking in New Jersey, Osagie-Erese said that her bank is two hours away, does not provide debit services to Roll Up Life and maintains high wire fees for the company.

What’s more, the limited number of banks in the state that do work with cannabis businesses will not have the bandwidth to serve the entire industry as it expands into an adult-use market, Osagie-Erese said.

The bottom line: entrepreneurs, especially minorities, are often turned away from starting a business in the cannabis space because of the banking challenges, Osagie-Erese said.

2. Cannabis businesses were declared ‘essential’ during coronavirus-related shutdowns but were not offered the same financial aid as other essential businesses.

Leo Bridgewater, Founder, Bridge H20; Director of Veterans Outreach, M4MM


In the early days of the COVID-19 pandemic, many states declared cannabis companies “essential businesses” that could remain open during coronavirus-related shutdowns. Despite their essential designation, however, cannabis operators were excluded from the Small Business Administration’s (SBA) disaster assistance due to federal prohibition.

Bridgewater said being denied SBA loans is just another way that cannabis businesses continue to get passed by when it comes to financial services, even when they are considered essential in their communities.

“During the COVID shutdown, cannabis businesses, us entrepreneurs were forced to watch our colleagues in other industries be awarded SBA recovery loans,” he said. “Those were things that were not afforded to us during the shutdown. … These are all things that we have to actually continue to see happen and get passed by while this industry is moving forward. 

“And if safe banking, if the larger MSOs is what you’re worried about, then let us give you the real boots-on-the-ground, real-time intel and tell you the ripple effect is mighty for those of us who are already in this business.” 

While introducing a broader reform proposal, the Cannabis Administration and Opportunity Act (CAOA), in July, Democratic Sen. Cory Booker said he’d lay himself down and block a standalone effort to pass a safe banking bill in the Senate because it would allow corporations to make a lot more money. 

But many small and minority-owned business operators have said safe banking and restorative justice go hand-in-hand in the cannabis industry. 

3. All-cash businesses are a public safety risk.

James Bauer, Director of Retail Compliance and Corporate Security, Livwell


Cannabis businesses are targeted by criminals because they know much of the industry deals primarily in cash, according to Bauer’s insights.

“The fact that most cannabis companies are forced to operate in an all-cash business continues to be a public safety risk,” he said. “Cannabis companies are specifically targeted by criminals because they know about the restrictions to banking placed on our industry that we have. The bottom line is criminals know that we are cash-heavy.”

In a 90-day period last year, Livwell had 15 burglaries at its Colorado retail locations, Bauer said, with criminals driving stolen vehicles into the buildings, cutting holes through rooftops and walls, staging lookouts and getaway vehicles, and attacking the stores with pry bars and sledgehammers purchased from local hardware stores. The company’s losses totaled hundreds of thousands of dollars, Bauer noted, with stolen product likely taken out of state and sold on the illicit market.

“That was in 90 days last year,” he said. 

In the most recent attempted burglary, which took place around 2 a.m. on Oct. 11, five individuals tried to shut off power to one of Livwell’s dispensaries to disable the cameras and alarms. They proceeded to damage windows and multiple doors to gain entry to the store but were ultimately unsuccessful, largely due to what Bauer described as an investment of millions of dollars into security.

Livwell has over 40 security guards who work around the clock and sit in the dispensaries’ parking lots overnight to be a physical deterrent to potential burglars. The company has also invested in surveillance equipment, Bauer said, and has trained its employees to handle burglaries.

Livwell has also seen what Bauer called a “drastic increase” in construction costs as it installs barriers to prevent future vehicle attacks and secures its doors and windows against break-ins.

Smaller and minority-owned businesses that may not have the same resources as a larger company like Livwell often struggle to put measures in place to guarantee a safe workplace for their employees, Bauer added, further advancing the idea that banking challenges only exacerbate barriers to entry for those entrepreneurs.

4. Logistical issues abound.

Alphonso “Tucky” Blunt, CEO, Blunts + Moore


Blunt, who said he has been selling cannabis since 1996 and is the first ex-felon to operate a dispensary in Oakland, agreed with Bauer about the public safety risks and pointed out the logistical concerns that also arise when running an all-cash business.