Hero Technologies HENC a cannabis company focused on a "seed-to-sale" vertical integration strategy, has migrated its banking operations from traditional financial institutions to banks that specialize in marijuana-related businesses (MRB). The company expects that the move to MRB banks will facilitate its compliance with state and federal financial regulations and help it manage cash and financial risk as it grows.
Banking for MRBs is challenging due to the varied regulations across the U.S., the cash-intensive nature of the marijuana business, and the explosive growth of the cannabis industry.
While marijuana is currently legal in 19 U.S. states and decriminalized and/or approved for medicinal use in 20 others, it remains illegal at the federal level. This creates a complicated financial compliance landscape. MRB banks specialize in the due diligence and oversight required to ensure compliance across this varied regulatory landscape.
Compared to sales in other industries, legal marijuana transactions are disproportionately in cash. This results in further oversight challenges for banks, as well as additional costs, such as transportation and security. MRB banks are set up to manage these specific issues.
"We are excited to move from traditional banks to MRB financial institutions," stated Hero Technologies' CEO, Gina Serkasevich. "We believe that backing from MRB banks will give us the specific financial tools we need to effectively execute our seed-to-sale cannabis market strategy. We are confident that this banking transition will help us manage rapid growth and maximize company value for our shareholders."
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