August 2018

MONEY MATTERS ¬nvesting & Finance ¬nsight Q&A with the co-founder of PayQwick Kenneth Berke U .S. cannabis companies are forecast to bring in as much as $10 billion in retail sales this year – money that will largely go untouched by the country’s leading financial institutions. Banks that do service the industry must follow a complicated patchwork of federal guidance and costly compliance rules or risk losing their charter, notes Ken Berke, co-founder of PayQwick. The firm in Calabasas, California, offers a suite of electronic payment solutions for cannabis companies and works with banks servicing the industry to help keep them compliant. Understanding the rules your banker must follow to take your company’s cash is the first step to landing and maintaining a solid banking relationship, Berke said. “Put yourself in the shoes of your banker,” he said. “Know what’s important to them.” Q What are the critical items businesses should consider as they seek out a banking relationship? A A cannabis business must establish credibility and trust with the bank. These tips are not listed in order of importance – all of them are important: • Meet with your banker in person, multiple times if requested. • Be open, honest and transparent with your banker. Do By Lisa Bernard-Kuhn not conceal anything, even if you think it will cost you the account. • Emphasize your commitment to compliance. Share your compliance policies and procedures with your banker. Most importantly, compliance comes from the top. Owners and upper management must stress compliance; if upper management does not value compliance, no one else will. • Appoint a chief compliance officer reporting directly to the CEO and give that individual real authority to get things done and discipline employees. • Know what’s important to your banker. Specifically, know and understand both the Cole Memo and the Feb. 14, 2014, guidance issued by FinCEN (the Financial Crimes Enforcement Unit of the Department of Treasury). Also, have a basic understanding of the bank’s Know Your Cus- tomer due-diligence obligations under the Bank Secrecy Act. If you don’t understand them or what’s important in them, get your attorney to explain them to you in detail. When submitting documents requested to open the account, be thorough and complete and submit them all at once. Do not submit incomplete. Q What type of banking institutions appear most open to working with the industry? 12 • Marijuana Business Magazine • August 2018