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Bank On It: Scottsdale Firm Offers Options for Cash-Heavy Cannabis Industry

A Scottsdale company is helping to wean the cannabis industry from its addiction to cash.
A Scottsdale company is helping to wean the cannabis industry from its addiction to cash.

Secure banking remains one of the largest hurdles for the cannabis industry.

Banks hesitate to accept clients in the industry due to the fact that cannabis is still federally illegal.

But where many see a problem, entrepreneurs see an opportunity. And that’s where Hypur stepped in.

The top brass at the Scottsdale company knew little about cannabis in their previous lives, but have decades of experience in banking. Rather than approaching the banking problem from the dispensary side, Hypur takes aim at the reasons banks are reluctant to accept funds from cannabis proceeds by making banking with cannabis companies safer.

“We’re trying to help set the standard by which this industry can and should be banked,” said Tyler Beuerlein, vice president of business development for Hypur.

Hypur provides banks with the technology to collect point-of-sale data from dispensaries that verify the money going into the account matches their client’s income from sales, therefore alleviating concerns of money laundering. Its technology allows banks to accept dispensaries more readily, which in turn makes it easier for Hypur to find a bank for a dispensary.

Beuerlein explained that banks are risk-averse by nature. Their officers, he said, take a special risk in banking something like a federally controlled substance.

“It takes a special breed of institution to get into this market,” Beuerlein said, “and they all have different reasons for doing so.”

Those reasons range from the clear profitability of the cannabis industry to something resembling altruism.

Some banks, Beuerlein said, simply seek to increase deposits in the bank if they’re “heavy on the lending side of the fence.” Some just want to be part of the solution to help keep the cash off the streets, and to help it from potentially causing problems in the community. Others have had personal experience with cannabis and want to support the industry.

But Hypur’s services don’t just help dispensaries find banks, they also make transactions easier for patients.

Customers can sign up with Hypur Commerce at dispensaries that are clients at a bank using Hypur. Hypur Commerce allows customers to link their bank account and simply insert a PIN to pay for cannabis electronically. No card, no cash, just the number, and patients can pay for their product.

While Beuerlein wouldn’t name any of the company’s clients or banks he works with, he asserted that Hypur partners with some of the largest cannabis banking and money-service institutions in the country. Hypur’s got clients in Arizona, California, New Mexico, Oregon, and Washington, he said. The plan is to be in every major cannabis market by the end of the year.

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One of the last holdouts is Colorado. Beuerlein said there was no reason in particular they hadn’t quite cracked the Colorado market yet, just that they’ve been focused on “executing their model” in other markets.

Hypur spotted cannabis as its initial opportunity four years ago, but experience revealed that other industries, such as payday loan or other “cash-intensive” industries experience many of the same problems.

In the beginning, Beuerlein said, when someone at a conference had questions about the cannabis industry, they’d pull them into a back room to talk about it. Now, he said, they’re on stage for some of the biggest banks in the country talking about cannabis.

“We’re trying to help them provide transparency that makes the most difficult accounts in the banking world the most transparent,” Beuerlein said. “And at the end of the day, that’s what’s going to make those industries thrive.”

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