North Little Rock-based Abaca has processed more than $2 billion in transactions for the cannabis (marijuana) industry. Growth with the financial technology (fintech) banking company comes as more states in recent years have legalized some form of marijuana use.
The company recently announced it “compliantly” processed the transactions through its “bank-backed financial technology” that provides “normalized financial services for an underbanked industry.”
“In the past two years, we’ve been hyper-focused on helping our customers do business faster with greater accuracy, controls and stability, allowing them to achieve efficiency and scale their financial operations,” Abaca CEO Dan Roda said in the statement. “To see that we’ve now facilitated $2 billion in commerce for our customers is very rewarding. We plan to continue leveraging our cannabis compliance and technology expertise to find new ways to empower the industry as it continues to grow and evolve.”
The Arkansas-based fintech also has an office in Chicago and offers its services to cannabis dispensaries, cultivators, processors, and ancillary businesses in Arkansas, Colorado, Florida, Illinois, Louisiana, Michigan, Missouri, Montana, North Dakota, Ohio and Oklahoma.
‘SAFE’ BANKING LEGISLATION
The push continues at the federal level to make banking easier for marijuana/cannabis companies. In April 2021 the U.S. House of Representatives voted 321-101 – a rare bipartisan tally – to approve the Secure and Fair Enforcement (SAFE) Banking Act (H.R. 1996), sponsored by U.S. Rep. Ed Perlmutter, D-Colo.
The SAFE Banking Act would create protections for financial institutions that provide financial services to state-legal cannabis businesses. The Senate version has yet to receive a vote, and is sponsored by U.S. Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., with 180 cosponsors.
The Washington, D.C.-based Marijuana Policy Project (MPP) reports that as of December 2021 that states with some form of legal marijuana sales reported a combined total of $10.4 billion in tax revenue from legal, adult-use cannabis sales. That amount does not include revenue for states and cities that have implemented a tax on marijuana sales. For example, the city of Denver has a 5.5% local sales tax on adult-use cannabis and has collected $237.5 million as of November 2021, according to MPP.
MARIJUANA TAX REVENUES
The MPP also reports that 18 states legalize, tax, and regulate cannabis for adults 21 and older, 31 states have decriminalized some or all marijuana laws, and 36 states have some form of medical marijuana law.
Following are the top five states in terms of tax revenue, according to a Jan. 5 report from MPP.
• California (legalized in 2018): $3.123 billion
• Washington ((2014): $3.051 billion
• Colorado (2014): $1.791 billion
• Oregon (2014): $635.512 million
• Illinois (2020): $562.75 million
Eligible Arkansans spent $264.9 million on medical marijuana in 2021 with the state’s 37 licensed dispensaries, and sales recently surpassed $500 million since the first dispensaries were opened in May 2019. Tax revenue from sales since 2019 totals $57.349 million, with $34.5 million of that collected in 2021. The data was provided by the Arkansas Department of Finance and Administration, the parent agency of the Arkansas Medical Marijuana Commission.
The constitutional amendment legalizing medical marijuana for 17 qualifying conditions and creating a state medical marijuana commission, was approved by Arkansas voters 53% (585,030) to 47% (516,525) in November 2016.