Abaca is a banking fintech that offers banking and other financial services to the cannabis industry in the US. You can open a cannabis bank account with one of its FDIC-insured partner credit unions or banks. Abaca allows you to access banking and financial services at the comfort of your home or office.
At the moment, Abaca accept applications from cannabis businesses that are plant-touching in Arkansas, Colorado, Florida, Illinois, Louisiana, Michigan, Missouri, Montana, North Dakota, Ohio and Oklahoma. As of ancillary hemp or cannabis entities, your application can be accepted from any state within the United States. The client Abaca serves include small cannabis businesses, corporate and MSO, hemp and CBD businesses, and cannabis ancillary businesses.
Traditional banks find it extraordinarily complex and cumbersome to meet all of the compliance requirements of banking the cannabis industry–essentially, banks must track every dollar in and out of an account and ensure it is a legal transaction. Abaca solved the conundrum by creating powerful technology that automates and manages the complex tracking and reporting necessary to provide safe, compliant cannabis banking. Every Abaca bank account is housed at a chartered financial institution that has partnered with Abaca to deliver your banking services.
How Abaca Banking Works
You need to go through 4 steps to get started with Abaca.
- Business Information. Tell Abaca about your unique business needs by filling out an application form. Abaca team will send you options and pricing.
- Due Diligence. You will work with your dedicated Abaca representative to collect and submit all the necessary compliance information.
- Onboarding. Abaca will help set up integrations and onboard your team with minimal interruptions to your business operations.
- Deposit. Make your first deposit and start banking. There is an initial deposit requirement that varies depending on a number of factors, including location, ownership, and other underwriting considerations.
Requirements for Opening a Bank Account With Abaca
Whether you are in the cannabis or hemp subsectors, you will need the following documents to open an account with Abaca:
- Articles of organization or incorporation
- Cannabis business license
- Employer Identification Number (EIN)
- Executed Bylaws or Business Operating Agreement
- Business permits
- Executed corporate minutes or banking resolution
- Customer profile on each signatory and your company
- W-9s on each signatory and the company
- 2 types of ID on each signatory
- Background checks
- Mutual non-disclosure agreement
Abaca has a system that allows it to:
- Do its due diligence on the owners of cannabis-related businesses and their bank accounts
- Make it easy for entrepreneurs in the cannabis sector to open and operate their bank accounts
- Monitor the incorporated businesses to detect any suspicious dealings
- Facilitates streamlined reporting
Abaca Cannabis Business Banking Solutions
Abaca offers cannabis business bank accounts and a number of other solutions.
- Payment Solutions. One of the challenges faced by cannabis-related businesses is the unavailability of alternatives to cash. Abaca offers reliable payment solutions such as debit and credit card processing.
- Cannabis Business Loans. Abaca offers cannabis business loans including money for equipment, purchasing inventory, real estate, or any other aspect of the cannabis business.
- Cash Management. Onsite cash handling, storage, armored transportation and deposit.
- Receivables Management. Abaca’s Receivables Management gives cannabis operators access to electronic ACH bill pay options. Payments can be integrated into your accounting on ERP system.
Abaca Cannabis Banking Fees
Fees and cost for cannabis banking and related services are usually high primarily due to the high regulatory compliance costs of providing the service. You need to contact Abaca about fees for accounts with Abaca’s partner institutions for ancillary, CBD businesses, cultivators, processors and dispensaries. There are additional fees for multiple locations, and for cash deposits.
Abaca Cannabis Banking Alternatives
Abaca is not the only banking fintech offering banking and financial service solutions to the cannabis industry. Others include:
Final Thoughts on Cannabis Banking Solutions
One of the key challenges that entrepreneurs in the growing cannabis industry face is banking. It is interesting that a sector whose worth is about $14 billion, and that has been expanding tremendously over the years, still struggles with obtaining the fundamental banking services. Abaca is one CBD friendly banks that seeks to address cannabis banking challenges by working with cannabis businesses as well as financial institutions.