Curious how banks can navigate the complexities of the cannabis industry? This candid conversation delivers strategy, clarity, and a few laughs along the way.
In this Travillian Next episode, Keith Daly, Principal, Banking & Fintech Search at Travillian chats with Chris Van Dyck, Partner at Cogent Law, about what banks need to know before entering the cannabis space. They dig into the real risks (hint: it’s not legal trouble), why the SAFE Banking Act remains a long shot, and how savvy cannabis businesses are reshaping financial services.
Listen to the conversation below or read the summary.
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(00:00) Welcome + Guest Introduction
Keith Daly kicks off the episode by introducing Chris Van Dyck of Cogent Law. They acknowledge their mutual industry contacts and preview their focus on cannabis banking, an increasingly relevant topic for community banks seeking new revenue streams.
(01:30) The Cannabis Legal Landscape
Keith and Chris touch on the expanding legality of cannabis across the U.S., noting that over 40 states have either medical or recreational programs. Chris reflects on how crossing state lines changes the legal status and creates an uneven banking environment.
(02:45) Chris’s Credit Union Background
Chris shares his journey from a regulatory role into cannabis banking at a Maine credit union. He recalls interviewing for the job while still wearing his “regulator’s hat” and quickly helping the institution implement a compliant cannabis banking program.
(04:30) Cogent Law & Its Model
Chris outlines the structure and mission of Cogent Law. It’s a lean, remote-first legal firm focused on client outcomes, often offering fixed-fee arrangements. Chris joined after collaborating on a cannabis banking conference and now leads their work in that area.
(06:00) The Three Big Risks in Cannabis Banking
Chris presents a framework for understanding risk:
- Regulatory risk is the largest and most pressing, with potential exam downgrades
- Reputational risk is mostly about quitting a program after starting
- Legal risk, while technically present, is minimal in practice thanks to public policy and law enforcement support for financial transparency in cannabis
(11:00) The Federal Scene & The SAFE Banking Act
They discuss the long-awaited SAFE Banking Act, designed to protect banks that serve cannabis clients. Chris shares that while there’s new buzz about it gaining momentum, he’s seen false starts for years and remains skeptical of fast federal progress.
(13:30) Risk vs. Reward for Banks
Chris and Keith agree that in legal states, the greater risk may now be lost opportunity. Banks must weigh their risk appetite but also recognize the growing demand and underserved market for cannabis banking services.
Travillian explored this further in The Green Scene: Community Banks and Cannabis Banking, another podcast episode that digs into how financial institutions are approaching this space.
(16:00) Cannabis Business Sophistication
Chris pushes back against outdated cannabis stereotypes. Today’s cannabis operators are financially astute and accustomed to regulatory scrutiny. If a bank can build a solid, compliant program, these clients often become loyal and profitable.
(18:00) Lending Potential & Final Thoughts
They wrap by exploring future opportunities, particularly lending to cannabis businesses. Chris encourages banks to evaluate cannabis just like any other vertical. Keith notes the changing laws in key states and encourages banks to consider acting sooner rather than later.
