Honolulu, HI (September 12, 2017) – Governor David Ige and Bank Commission Iris Ikeda Catalani announced Tuesday that the medical cannabis licensees in the State of Hawaii will now have a banking solution for their operations. Safe Harbor Private Banking, a banking division of Partner Colorado Credit Union, will be providing banking services to medical cannabis operations, according to a press release.
Oahu licensee, Aloha Green Holdings Inc. (Aloha Green) will bank with Safe Harbor Private Banking. CanPay, a debit payment company, will provide patients an app-based payment method which allows patients to debit their checking accounts for payment of medical cannabis, thereby eliminating the need to use cash for their transactions. The amount of the purchase will be deposited directly to the medical cannabis licensee's account at Safe Harbor Private Banking. While Aloha Green's goal will be to have all patient's utilize CanPay by October 1, 2017, patients preferring to use cash for purchases will not be turned away.
This marks the first time in the country that banking partners, state regulators and cannabis licensees have worked together to bring banking solutions to a previously unbanked legal medical cannabis market. Hawaii financial institutions have refused to service the medical cannabis industry even though the US Department of Justice has issued guidelines whereby financial institutions may service the industry without fear of being shut down by the US Department of Justice.
The transition to bring legitimate banking and merchant services to the Hawaiian market has been underway for nearly a year and involved collaboration between top financial regulators, officials and financial partners from across the country.
“The arrival of banking and payment services for the cannabis industry in Hawaii will enable Aloha Green and other dispensaries to reduce or eliminate cash sales, which will help keep these businesses much more secure,” said Kerry Komatsubara, executive director of the Hawaiian Educational Association for Therapeutic Healthcare (HEALTH), the trade association representing all eight Hawaii licensees. “The cash-only precedent in this industry is less than ideal for customers, employees and the general community, so having alternative options available really does change how we do business for the better.”
“Hawaii cannabis businesses will be on the newly automated Safe Harbor platform. Under our supervision, we'll methodically work with a financial institution in Hawaii to ensure safety and soundness as they integrate accounts into their portfolios. Our collaborative work with Hawaii's Commissioner of Financial Institutions, Iris Ikeda, the Executive Director of the Hawaii Education Association for Licensed Therapeutic Healthcare (HEALTH), Kerry Komatsubara, and our partnership with CanPay, has resulted in a legitimate and efficient way for medical marijuana licensees to do business and safely serve their clients,” said Sundie Seefried, Safe Harbor's CEO. “Our cannabis banking compliance program, created and tested in the Colorado market, is now being installed for the cannabis industry in Hawaii, and as in Colorado, will keep the citizens of Hawaii safe as the state launches legal cannabis.”
“Removing cash from the equation leads to a more transparent and legitimate way to do business that’s both convenient and secure for all involved,” said Dustin Eide, CEO of CanPay. “Through the lengthy collaboration between ourselves, Safe Harbor and the tremendous individuals in Hawaii’s legal cannabis market, these dispensaries are now able to operate as closely as possible to businesses in any other industry.
“Aloha Green Holdings Inc. is proud of be part of a banking solution that protects patients, employees, and the public,” stated James H.Q. Lee, Chief Executive Officer of Aloha Green Holdings Inc. “This move enables our fledgling industry to leap forward while showcasing how we can work pull together from across the nation to address obstacles. Hawaii was one of the first states to legalize medical cannabis. And though the opening of dispensaries was slow coming, we are grateful to be part of a progressive state with an administration that moves quickly to protect its residents. Aloha Green Holdings Inc. will continue to advocate and implement the most innovative solutions in order to lead the cannabis industry in Hawaii and the country.”
Cannabis companies across the nation find difficulty in accessing banking services at a federally insured financial institution because cannabis is still illegal on the federal level and listed as a Schedule I drug by the U.S. Drug Enforcement Administration. Although the federal government has provided guidance in the form of the Cole memo, released by the Department of Justice, and guidance issued by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), the vast majority of banks fear getting shut down by the FDIC or being held criminally liable for illegal activity.
