Soon after New York established a framework for legalizing sales of recreational marijuana in 2022, lawsuits began flying as would-be retailers chaffed under burdensome rules and a slow-moving licensing bureaucracy.
Gov. Kathy Hochul herself admitted the rollout was botched, and early last year set about getting the Office of Cannabis Management in order.
The agency’s year-end report for 2024 credits internal restructuring and new initiatives with making “significant progress” in bringing forth more adult-use retail dispensaries. Some 300 licensed storefronts now operate statewide, according to the office, with the count among 10 counties in the greater Capital Region at just over 40.
Retail sales last year totaled nearly $758 million through November, the annual report says. State and local sales taxes are levied on purchases, with proceeds going to public schools, community grants, and drug treatment and prevention programs.
Among the report’s recommendations to meet “evolving conditions and needs,” though, is one tied to sales: Because marijuana is still classified as a controlled substance on the federal level, cannabis retailers face unique banking challenges.
They’re a cash-only business – credit cards cannot be accepted – which can pose security risks. And the big national banks are wary of interaction, concerned about violating federal regulations.
“New York’s legal cannabis market cannot thrive without access to reliable financial services,” the acting head of the Office of Cannabis Management stated earlier this month in announcing the launch of the “Cannabis Banking Directory,” an online list of contact information for banks and credit unions ready to do business.
To date, the directory has just nine participants, seven banks and two credit unions. Some of the banks are headquartered out of state, but their websites indicate robust attention to cannabis clients.
One of the listed credit unions is AmeriCU Credit Union, founded in 1950 to serve civilians at Griffiss Air Force base in Rome, Oneida County, which has extended its membership and service footprint since then to an area stretching from the Southern Tier to the North Country.
Gail Rizzo-Spilka, an assistant vice president, said the credit union began offering deposit services to cannabis businesses in October 2022 and added lending (lines of credit, equipment loans) several months ago. She said the credit union heard about the directory at a “town hall” meeting organized by the Office of Cannabis Management and subsequently asked to be listed.
Rizzo-Spilka, in charge of membership development, said working with cannabis businesses “requires additional due diligence and ongoing monitoring.” A cash courier service, for instance, is needed for cash deposits.
She said specialized staff training was necessary to add the cannabis services, and now the credit union has a “dedicated team” responsible for those accounts.
The Office of Cannabis Management said the directory is open to accredited institutions providing services to the cannabis industry, and new participants will continue to be added.
H/T: www.dailygazette.com
