The CBD industry is still fraught with controversy, though legalization and general acceptance of CBD and hemp-derived products continue to grow steadily. The fact that the banking sector still sees CBD and hemp as a high-risk industry limits the banking options for young CBD startups. Chase Bank is one of the first banks to open up to CBD business. Let’s see what they can and cannot do for you.
Chase Bank allows CBD and hemp businesses to open bank accounts with them, and they started giving CBD business loans recently. They do not offer payment processing, opting to wait for banking acts and bills to be updated. This gives them time to profile a successful CBD business for future vetting.
Banks that offer services to the CBD industry are few and far between. Those who do are clear that they only support it if the businesses sell hemp-derived CBD, not marijuana-based products. The legal boundaries can make the industry very complicated, hence the “high-risk” rating from banks. Chase Bank is one of the few willing to take the risk so early, but that’s not without its cons.
Which Services Does Chase Bank Offer CBD Business?
It is interesting to note that Chase Bank’s website does not mention its CBD stance at all. Unlike Bank of the West, which proclaims its CBD affiliations loudly, Chase Bank is quiet about the topic on all its formal communication platforms. This aligns with its general approach of care toward the CBD industry. Chase is careful not to do too much, too soon, and to not be loud about it at all. [1]
Chase Bank has opened its vaults to the CBD industry. Any CBD entrepreneur may now open a bank account with Chase Bank for their business. Transactions are processed as usual without paying higher banking fees. Chase requires that the company be upfront about its involvement in the CBD and hemp industry. No marijuana businesses are allowed to open Chase Bank accounts. [2]
A relatively new addition to Chase Bank’s services to CBD businesses is the availability of business loans. CBD businesses may now apply for business loans or startup funding from Chase Bank just like any business would. The requirements for approval are still a bit unclear, though. It seems to be mainly at the discretion of the branch manager to approve a CBD business loan application.
The fact that Chase Bank now offers loans is a clear sign that things are changing. Banks usually don’t mind taking your money. But to provide you with some of their own money to make more indicates a measure of trust in your business and industry. Hopefully, more national banks will pick up this trend within the next few years. [3]
Services That Chase Bank Doesn’t Offer CBD Businesses
Chase Bank is one of the larger banks in the United States. This makes it incredible and encouraging to see how much they’ve opened up to the high-risk CBD industry in such as short time. Having said that, Chase Bank still has some reservations about the CBD and hemp industry. They haven’t opened their entire banking platform to CBD businesses yet.
At present, Chase Bank does not allow payment processing facilities for CBD sales. So regardless of what size or scope of business you have, if you sell CBD, you are not allowed to process payments through Chase Bank.
It may seem a bit strange that they would allow loans but not payment processing. However, this makes sense when you consider that credit cards can be used nationally or even internationally. Since CBD has not been legalized everywhere yet, this could cause several problems for Chase Bank. This is why they opt to instead steer clear of CBD payment processing for the moment. [4]
Why Does Chase Still Avoid Certain CBD Services?
The banking industry, in general, is still cautious around the allowances they make for CBD businesses. Banking is an old-school industry and, in many ways, is still struggling to catch up with modern times. Just like scientists who believed that the internet would just be a passing fad, banks are afraid that legalization would simply stop or CBD would be found to be a hoax. [5] [6]
This is not necessarily skepticism on their part. When you are investing or opening up your business for new opportunities, a measure of caution is often a good idea. On the other hand, too much caution makes you late for the party.
It is also apparent that Chase Bank’s approach has an upside for the bank as well. Their step-by-step roll-out process allows them to build up a profile of a successful CBD business. Data they gather over time could help them vet which CBD businesses are a good investment before taking the risk of offering them certain services. [7] [8]
CBD Businesses Tend To Distrust Chase Bank
This is understandable. Just as banks tend to distrust CBD businesses, the opposite is true as well. Since CBD has been wrapped in controversy for so long, people in the industry are used to being shunned. There is also fear that the banks may change their stance on CBD at any time.
Chase Bank is no exception. Some CBD business advisers are even telling CBD entrepreneurs to stay away from Chase Bank and other larger banks. Their reason for saying this is that there have been claims where Chase Bank summarily closed a few CBD business bank accounts on a whim.
These claims seem to be backed by evidence as well. A company named Green Flower Media claims that Chase Bank closed its account after only four days. Chase Bank cites the company’s social media discussions about cannabis as the reason. This concern appears to be a common thread in CBD and hemp discussion forums.
CBD businesses are understandably upset about this since cannabis as a species includes hemp, which is primarily legal.
Chase Bank is probably doing this due to the fact mentioned earlier that approvals are dependent on local branch managers. This situation is not ideal in a national or federal bank, where higher-ups may have a different view on the matter. Chase Bank’s failure to have clear policies in place for CBD businesses leaves too much room for interpretation and unfair closure of bank accounts. [9]
The Future Of CBD And Chase Bank
Despite the negative aspects, there is also a lot of hope. The simple fact that a large bank like Chase is willing to open accounts and give loans proves that the times are changing. As legislation becomes more polished and banks put more specific policies in place, the future of CBD business will improve. Many other banks are already at the forefront of this change. The others will eventually follow suit.
Important Questions
What banks accept CBD business?
In addition to Chase, there are a number of banks that accept CBD business, including Silicon Valley Bank, Timberland Bank, The Salal Credit Union, and more. We have an entire post on Banking for the CBD Industry that covers which banks accept CBD businesses and why it’s challenging to get a bank as a CBD business.
Is banking for CBD and hemp businesses the same?
Yes and no. If the hemp business just works with hemp fibers or other non-psychoactive byproducts, like hemp oil, they can likely use any normal bank. The business may have to sign documents stating that they will not work with CBD or other cannabinoids. If the hemp business works with hemp CBD, it will have all the same challenges as any other CBD business. For more information, see our article about banking for the CBD industry or our article on CBD business loans.
Conclusion
Chase Bank is a good option for your CBD business banking needs. You can open your bank account and even get a loan. Other providers can cover the few services that Chase does not offer. But it’s crucial always to have a backup plan ready if things go south and someone higher up decides to close your account. But keep going; the future of the CBD business is looking brighter by the day!
References
[1] https://www.chase.com/business [2] https://www.bigcommerce.com/articles/selling-cbd-online/cbd-financing/#cbd-friendly-banks [3] https://www.ft.com/content/28d8375a-3bd9-4fba-b1b7-a2e5e8b4fcdb [4] https://www.quora.com/What-are-the-banks-that-do-business-with-CBD-businesses [5] https://www.nbcnews.com/business/business-news/cbd-products-are-flying-shelves-so-why-are-banks-so-n1068151 [6] https://blogs.mprnews.org/newscut/2012/02/the_internet_futurist_who_thou/ [7] https://www.icsid.org/uncategorized/can-i-sell-cbd-products-using-my-personal-bank-account/ [8] https://www.profitableventure.com/loans-banks-accept-cbd-business/ [9] https://www.ganjapreneur.com/chase-shuts-down-companys-bank-account-for-talking-about-cannabis/
