The National Association of Cannabis Businesses (NACB) has teamed up with the Emerging Markets Coalition (EMC) to create a national standard for cash management for the cannabis industry.
While the legal cannabis market in the U.S. is continually advancing, being estimated to reach $35 billion by 2025, cannabis businesses are still mainly relying on cash-based transactions.
Operating with large sums of money is risky, representing one of the major problems for the industry. Just last week, the measure that aims to resolve it was reintroduced in the U.S. House of Representatives.
What’s more, the Secure and Fair Enforcement (SAFE) Banking Act was also represented in the Senate on Tuesday. If the bill passes it would protect financial institutions that work with legal cannabis businesses, providing cannabis companies with easier access to much-needed banking services.
“Financial institutions have been hesitant to serve cannabis-related businesses due largely to the fact that cannabis remains illegal at the federal level. Even after legalization occurs there will be a steep learning curve for both industries,” NACB president and CEO Gina Kranwinkel stated.
“The new National Standards for Cash Management will provide cash management tools and protocols cannabis-related businesses need to incorporate in their operations to be ready and able to work with financial institutions. We couldn’t be more pleased to partner with EMC and look forward to sharing their expertise and ours.”
NACB is working on helping the legal cannabis market become a secure and ethical industry. Once completed the cash management standard will be its newest national standard that demonstrates “best practices in cannabis business.” NACB already helped establish some national standards in packaging and labeling, lab testing, infused, advertising, hemp, and cybersecurity.
“The Emerging Markets Coalition is excited to be partnering with NACB in developing standards. This is a collaboration of both the banking and cannabis industries to ensure pragmatic and prudent practices to support the transparency and anti-crime efforts necessary in a cash heavy industry” EMC co-founder and CEO Kirsten Trusko said.
CBD Spending Spikes To $3.8B
According to the newest New Frontier Data report, the CBD part of the industry has also seen a notable expansion with a total U.S. consumer spending on CBD projected to have hit $3.83 billion last year.
What’s more, it is estimated to reach $6.26 billion by 2025, a five-year compound annual growth rate of 12.16%.
“Despite regulatory ambiguity and supply chain obstacles, the number of CBD brands in the U.S. has surged amidst strong and growing consumer demand,” New Frontier Data founder and CEO Giadha DeCarcer stated. “The 90% decrease of biomass prices from 2016 to 2020, while bad for farmers and extractors, has led to cheaper and more widely available CBD products, attracting more consumers into the market.”
With further industry development, the resolution of the “cash-based operations” is of the essence.
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