3.3.25 - How does TASI ® Bank Assess the current state of the cannabis industry in California?
03.03.2025
ASK TASI
How does TASI ® Bank Assess the current state of the cannabis industry in California?
It is rapidly becoming clear that the future of the California cannabis industry is not as rosy as it once was. Having committed expertise and resources to the industry for nearly a decade, at TASI ® Bank, we watched the changes as an industry participant. We think of ourselves as a “420-Bank” as we have progressed from serving only a part of the industry to a full-service financial partner with customers in Northern and Southern California.
And while over the years, the state has loosened the restrictions on banks as they work with the cannabis industry, it is also true that financial institutions, for the most part, have stayed away. Combined with still existing regulatory and legal restrictions, cannabis businesses in California continue to be faced with challenges. As recently as 2023, the state was the world’s largest cannabis market, with over $5 billion in total sales. No longer.
As we assess the current state of the industry, we see the obstacles to renewed growth are substantial, ranging from local regulations to failed efforts to obtain federal reclassification and taxation of industry participants and consumers.
Here are some of our concerns:
· There are now more inactive cannabis licenses than active ones.
· Cannabis growers have faced a substantial drop in the value of their crops in the last three years
· The illicit market continues to grow
· Because of federal regulations, some loan programs are not available to segments of the industry, and
· Federal, state, and local tax policies add financial burdens that affect the industry across the board.
We take pride in being mavericks, actively supporting efforts to rationalize the industry by working with advocacy groups and attending industry events to enhance our knowledge and build partnerships. We continue to look for ways to help cannabis businesses across the board. As mavericks, we are not the typical bank. We see ourselves as financial advisors looking for ways to bring cannabis customers the variety of services they need.
We offer a full range of financial services to the entire cannabis industry in California, including growers, manufacturers, retail outlets, and distributors. These include tailored loans for CRBs, helping them scale and grow in a challenging economic environment.
As a 420-friendly bank, we help CRBs in navigating the complex regulatory landscape with FDIC-insured accounts, cash management, and armored truck pickup to help CRBs manage their cash flow securely.