A Platform Developer is Restructuring the Way We Think of Banking in the Cannabis Industry
I can’t wait until the day that I no longer have to write a “will they?”/”won’t they?” article about banks working with the cannabis industry. There’s been so much back and forth over the years with really very little happening in favor of marijuana businesses finding steady, reliable banking options. Most businesses are operating as cash only establishments while some have dabbled in accepting cryptocurrencies which have their own set of risks. The future of the marijuana industry is undoubtedly bright but the banking situation is a persistent problem that deters investors and creates a hazardous predicament for small businesses. Lamine Zarrad, most notable to the cannabis industry as one of the creators of Tokken, may have found the solution through observing gig economy.This week, Zarrad sat down for a conversation with Matthew Kind’s CannaInsider podcast that starts out with a somewhat dark outlook before finding the light at the end of the tunnel. The doom-and-gloom forecast comes courtesy of the usual suspects: Jeff Sessions, the turning over of the Cole Memo and the generally tumultuous landscape of American politics. If you’re unfamiliar with Tokken, it’s basically a platform that not only provides financial institutions with a sense of trust and certainty but also safeguards users by providing compensation should an electronic payment be short (or not paid altogether). As Zarrad plainly points out, this is a gear in a machine that relies almost solely on perceived stability through faith.
Tokken’s Role in the Marijuana Industry
Why Banks Are Pulling Away from CannabusinessesZarrad assembled a team of experts ranging from renowned software developers to ex-CIA officers to develop Tokken into a trusted platform that not only assured banks stayed compliant but minimized risks such as money laundering and terrorist funding that are so prevalent in unregulated industries. But this was when the Cole Memo was intact. Zarrad estimates that 30 – 50 banks were intentionally dealing with the cannabis industry at that point. But once the protective umbrella of the Cole Memo was removed, that already minimal number of financial institutions plummeted. He then reiterates that if FinCEN guidance is removed (a very real possibility), no bank will dare touch cannabusiness. Dark times indeed.
The Introduction of Joust
Fortunately, Zarrad is a true innovator seeing opportunity in times of challenge. Recognizing that the growing reluctance of banks to work with the cannabis industry meant a turbulent road for Tokken, he began observing gig economics to find a different path. Thus began the development of his latest platform, Joust, which creates a means for freelancers to not only guarantee that they receive their payments but also streamlines their various operation platforms into one source, saving them time. So how would this apply to the cannabis industry? Joust aims to move economic dealings away from big banks that have been shown time and time again to place their own interests above those of their patrons. Instead, they plan to place their holdings in minority-owned institutions with a vested interest in fostering communities.