Latest Attempt to Solve Marijuana Banking Issues Involves Native American Tribes

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Yet another possible solution to the marijuana industry’s banking woes is in the works, and this one involves newcomers to the cannabis scene: Native American tribes.

A company called CannaNative, founded in May by a trio of Native American businessmen, is currently trying to sell tribes in the western U.S. on the idea of being bankers for cannabis companies desperate for somewhere to house their money.

“We call it the ‘Little Switzerland model,’ if you will,” said Anthony Rivera Jr., a partner with CannaNative.

Rivera, who holds a degree from Harvard Business School, teamed up with Andy Nakai – a member of the Navajo nation and former vice president of Canyon National Bank – and Montana businessman Cedric Black Eagle to start the company.

Rivera declined to disclose which states the San Diego-based company is approaching tribes in, but he pointed out that southern California has the biggest concentration of Native American reservations in the country.

To be sure, the project is still in its early stages, and it’s far from a sure thing. Other attempts to ease the marijuana industry’s banking problems have sputtered out, and some observers expressed skepticism over CannaNative’s plan.

But if the company can pull it off, marijuana-related companies will be able to utilize tribes throughout the western United States within the next six months for financial services, Rivera said.

Here’s how it would work: Companies would sign up for accounts, and depending on where they’re located, an armored car service would pick up cash deposits and take the money to a secured facility on nearby tribal land. The client would then have access to the funds via an electronic system, so the money could be used for payroll and other needs.

Availability of banking services would be limited from a geographical perspective, as businesses would need to located somewhat close to the tribes that sign up to participate. CannaNative therefore wouldn’t suddenly throw open its doors to every marijuana company in the country.

But there are plenty of reservations in the western portion of the country, from California to Arizona to Colorado to Washington State.

The notion is still in the developmental stages, Rivera said, and no tribes having signed formal agreements to develop or represent such a system.

“We have a handful right now that are serious in taking the step. They like it, they’re excited about it, they’re confident about what they can do,” Rivera said. “We want to make sure we implement the process properly. We don’t want to just throw it out there nationwide and just have holes in it. We want to make sure it’s very tight and functioning. And from there, we’ll scale out as we move along.”

Some observers, however, question whether the idea has legs.

“Nine times out of ten, especially in this industry with all the excitement, people are just doing stuff for show rather than substance,” said Demitri Downing, a board member of the National Indian Cannabis Coalition.

There’s also a big push at the federal level to get some sort of banking solution for the cannabis industry approved by Congress, and if that happens CannaNative’s services could become somewhat irrelevant, Downing indicated.

“We all see that coming, and we hope that’s coming. So this business plan, if it does come to fruition, could be short-lived,” Downing said.

Rivera, however, pointed out that tribes have been managing huge cash flows since the 1980s, ever since they were granted the right to set up casinos on tribal land. That in particular lends itself to money management on a large scale, he said, and is something that can be adapted to the cannabis industry.

Some observers think the plan has promise. Lael Echo-Hawk, a Native American attorney in Seattle, said in an email to Marijuana Business Daily that CannaNative has “the right idea and the right approach.”

“They are familiar with tribes,” she wrote, “and also understand the industry from a non-tribal and tribal perspective.”

John Schroyer can be reached at