The U.S. cannabis industry relies on cash, creating safety and security problems that Kansas City-based Bison State Bank hopes to solve though a new partnership.

With only $71.8 million in assets, Bison State Bank is one of the smallest local banks. But it sees a growth opportunity by providing cash management to the U.S. cannabis industry, a business with $42.98 billion in annual revenue, according to data from Statista.

It’s working with Pennsylvania-based National Secure Transport, a nationwide secure cash management and logistics provider. The company now acts as an official cash-in-transit and virtual branch vendor for Bison State Bank. National Secure Transport picks up cash from businesses, then transports it in an armored car, delivering and depositing it directly at the Federal Reserve Bank.

“This allows us to bring our products and services, which we believe are incredibly competitive, to our clients across the country,” said Ryan Wiebe, executive chairman and owner of Bison State Bank. “It avoids a situation where a general manager is hopping into a car with a backpack full of cash and driving to the bank. Banks don’t like to keep large sums of cash on hand … We’ve eliminated the cash, which is the most dangerous piece for all the parties involved.”

Once the cash is deposited at the Federal Reserve, Bison State Bank handles the enhanced due diligence and compliance required for a bank to knowingly handle money from an operation that is legal under state laws but not federal laws. The Bank Secrecy Act has money-laundering provisions that must be carefully followed. The federal Financial Crimes Enforcement Network also requires banks to file Suspicious Activity Reports for all cannabis-related business.

At that point, it’s up to the U.S. Attorney General to enforce federal cannabis laws, but U.S. Attorney General Merrick Garland has made it a policy not to prosecute cannabis businesses that follow state laws. The policy has been in place since the Cole Memorandum was issued in 2013, outlining the process banks should take with state-legal cannabis operations.

Of more than 200 chartered Missouri banks, Bison State Bank now is one of about a dozen willing to provide banking services to the cannabis industry.

“Because there is a lack of participating institutions willing to bank the cannabis space, this allows us to bring banking products and services to clients across the country,” Wiebe said. “This is a massive opportunity for us to grow.”

The cost associated with entering the cannabis banking market is high, Wiebe said, requiring more full-time employees to handle compliance and keep the bank safe. It’s not something banks can dip their toes into.

“All the expenses associated with this are exponential, so just gaining $20 million in deposits isn’t going to be sufficient,” Wiebe said. “You barely cover at that rate. So you just can’t minimally participate. You have to fully participate and be involved in it. We are, so we do expect some significant growth from this. We intend to bring our products and services nationwide to states that allow it.”

The new collaboration will offer a crucial banking option for businesses in highly regulated industries and eliminate the need for physical bank drops.

“Our armored carrier services help to reduce costs for banks and streamline services for retail operators.”— Ari Raptis, CEO and founder of National Secure Transport

PHILADELPHIA, PENNSYLVANIA, UNITED STATES, June 27, 2024 / EINPresswire.com / — National Secure Transport (NST), trusted providers of secure cash management and logistics services for cash-intensive businesses and banks across the United States, today announced a new joint venture with Dart Bank to provide a full suite of cash management solutions for account holders in highly regulated industries.

Amid the ongoing demand for banking options for highly regulated industries, and the increasing trend toward digitization in financial institutions, the collaboration supports both NST and Dart Bank through the expansion of digital cash-handling services. As part of its offerings, NST provides a virtual vault containing different inventories for commercial clients, branch deposits, and ATMs, allowing Dart Bank to service clients without convenient access to the bank’s physical locations.

“Dart Bank is very pleased to enhance and expand our banking program by working with National Secure Transport to serve mutual customers in additional ways, providing greater convenience,” said Ross Sloan, a senior vice president at Dart Bank.

As part of the collaboration, NST picks up deposits and handles cash processing internally for Dart Bank customers.

“Our armored carrier services help to reduce costs for banks and streamline services for retail operators. We are honored to enter this relationship with Dart Bank to provide cash management solutions to more customers across our footprint,” said Ari Raptis, CEO and founder of NST.

Dart Bank joins NST’s roster of 20+ bank partners, with several more collaborations in the pipeline. By employing retired police officers and requiring two drivers per vehicle, NST provides a safe, all-encompassing solution for cash logistics in an era of increased risk.

For information, visit NationalSecureTransport.com.

About National Secure Transport (NST):

National Secure Transport provides clients with innovative end-to-end logistics, cash management, turnkey ATM solutions, and a cashless payment system. The company’s customer-service-oriented approach to cash management ensures safety, compliance, and first-rate customer success while saving clients time and money. National Secure Transport utilizes the latest advanced tracking technology, vehicle safety, and 24/7 all-encompassing surveillance for our fleet of armored vehicles. With top-of-the-line multiple GPS tracking systems and real-time vehicle CCTV technologies, the team keeps cash safe every step of the way. National Secure Transport utilizes the industry’s leading fully integrated cash management software to ensure accuracy, reduce risk, and eliminate time-consuming data entry with real-time reporting. For information, visit NationalSecureTransport.com.

Kim Prince

Proven Media

Step 1: Customer to Dispensary 

As a predominantly cash-only industry, dispensaries receive a large amount of cash from their customers each day. The transfer of cash from customers to dispensaries is the first step in the cash cycle. 

Step 2: Cash Vault Services or Smart Safes 

The money will then be placed in the back of the store in a secure vault, awaiting its scheduled pick-up from an armored carrier. The armored carrier will move the money to a safe holding vault—often called a virtual vault or outsourced currency vault, where a financial institution keeps a small repository in the branch of the armored carrier. 

Alternatively, operators can use a smart safe on location. Rather than store the cash in the back of the store and wait for the armored carrier to pick it up, dispensaries can feed their cash into the smart safe as it comes in. Smart safes are connected to the cloud, allowing retailers and armored carriers to access real-time reporting. 

Step 3: Secure Transportation 

The carrier will take currency (inventory) from the Federal Reserve, going back and forth to pick up currency and keep it in the vault. Cash and coins are kept in separate inventories. If ATM inventory is included, its contents will also have a separate inventory. 

Step 4: Reporting

The armored carrier can pack out change orders for the dispensary and pick up their cash on location. They can also bring cash back to the dispensary, carry out cash processing and note verification, and deposit processing on behalf of the financial institution. The armored carrier will then alert the financial institution that the process is complete. 

Dispensaries using smart safes don’t have to worry about this aspect of reporting, as the device automatically performs all of the reports, reconciliations, and balances. 

Step 5: Money in the Bank

Armored carriers are crucial in recounting cash, ensuring all bills are present without discrepancies, and taking the money to the Federal Reserve. Assuming everything is legitimate, dispensary owners will receive a provisional credit in their bank account in about one to two business days. 

Alternatively, banks give out daily provisional credits to those using smart safes. For example, money fed into the machine on Monday will result in a daily credit in their account on Tuesday. 

Armored Carriers vs. Smart Safes 

There are very few benefits to not using an armored carrier—the most notable being money saved. If you walk your cash to the bank, you save money on armored carrier services but also invite plenty of security risks handling large volumes of cash. Just one robbery or safety incident with an employee can bring massive liability. 

Smart safes come with a heftier price tag because they include more upfront costs and still require using an armored carrier to transport the cash. Additionally, you will pay the bank for turning on their daily credit service. However, the benefits, such as next-day provisional credits, automated reporting, and increased security, make them a solid choice for many operators. 

Final thoughts 

Ari Raptis, founder and CEO of Talaria and National Secure Transport.Whether you run a large multi-state operation or a local retail store, you have much to consider when it comes to cash management. Employee safety and internal security are two major factors that operators should never neglect. As you better understand the cannabis cash cycle and look into different options for cash management, keep safety and security at the forefront of your decision making.