The medicinal cannabis industry in Oklahoma is booming, but companies still face growing pains. Many of these logistical hurdles come from the fact that marijuana has been legalized in our state, but not at the federal level. A prime example of this is the notable lack of cannabis banking and digital transaction support.

Even today, few financial institutions are equipped to—or even interested in—serving the cannabis industry. This means that many farms, dispensaries, and other companies are working on a cash-only basis. They handle dangerous amounts of cash and struggle to keep up with manual accounting, record keeping, and compliance.

At Rocking Star Farm, we’re extremely fortunate and grateful to have found Regent Bank. We began our relationship early on, and since day one, we have enjoyed the convenience and legitimacy that comes with an official cannabis banking partnership.

Banking keeps our funds safe and secure, helps us keep up with day-to-day accounting, and provides a clear digital trail to assist with record keeping and compliance. With Regent Bank, we can offer safer, convenient cashless payment options to all our customers.

To learn more about Regent Bank’s involvement in the Oklahoma medicinal cannabis industry, we spoke with Sean Kouplen, Chairman & CEO of Regent Bank…

How did Regent get started in cannabis banking?

Interestingly, the head of our cannabis banking division, Keri Cain, happens to be my sister-in-law. She has had a history of muscular dystrophy. She has delt with pain and leg cramps for her entire life, and she was telling me as her brother-in-law about how wonderful some of the cannabis products were and how it was really changing her life.

At the same time, we were receiving a lot of project request from cannabis clients, so I asked Keri if she would look into this, and she did a tremendous job. We spent months researching it, and we became more and more serious about becoming, frankly, the best cannabis bank in America. We wanted to do it the right way in line with regulations, to treat our clients well and be a resource for them.

That led to launching this new division. It’s been very successful, we have not had any regulatory issues at all, and it’s led to wonderful new relationships for us, and we’ve been very, very happy with it.

What impact have you seen in serving cannabis industry customers? How does banking help them?

We have tried to position ourselves as the Cadillac in the space; we want to have excellent technology and expertise; we want to be very responsive to our clients. The net result of that has been hundreds of cannabis related clients.

I have learned that the stereotype of the cannabis business owner is completely inaccurate! The individuals in this space are very seasoned and sophisticated business owners. Many of them are executives and owners of other companies.

I’ve really enjoyed it because they need the service, they need the help. It’s very confusing, and I understand why. When you can dig into a problem like this where everyone else tends to pull away, it’s difficult. You have to do some work to figure it out and do it the right way. You have to make a significant investment to meet all of the regulatory requirements. A lot of banks have jumped in and realized it’s not easy, and jumped back out, but we’ve been that one consistent presence from the beginning.

Because we are meeting a need for these clients, it makes for a wonderful relationship. They are grateful, and we really like our clientele. It’s been a great win-win situation for both sides. We want to be in this together.

We’re helping them find insurance, and in fact, we bought an insurance agency just so we could help them get insurance. We help them find a way to process transactions. We help them with their security issues. We help them if they need to get in touch with the state.

Is Regent is planning on providing financing options for equipment, facility, land, or transport vehicles?

We do provide financing now, but there needs to be a non-cannabis source of income or collateral. We want to provide more financing. We believe in these clients, but at this point in time we have to be pretty selective about the financing side.

And let me back up and provide some background on this… Banks function on about a 1% profit margin. If you’re a $1 billion bank, which we are, and you make $10M in one year, then you are doing pretty well in our industry. If we make a loan and there is some rollback or issue and the collateral ends up being taken back, just one or two of those could sink the entire bank. We think that’s very unlikely, but we’re trying to be very careful on the financing side.

We believe it’s going to be federally legalized soon, and just this month, the house passed a cannabis banking bill that we are hoping will make it through the senate. That would open all of this up. We want to see the industry better served.

Has anything surprised you about the cannabis industry? What have you learned along the way?

It is a legitimate business opportunity, first and foremost. This is no different than clients we have in real estate or medical or finance industries. This is a very sophisticated and legitimate industry.

Second, I think the people in it are wonderful people, and are frankly out there for the good of others. They’re trying to help people, just like they did with my sister-in-law and her health condition.

The third thing that has surprised me, is that there is an incredible amount of investment coming into the industry. The average person just does not understand the demand and the potential that this industry has.

I’ve also been surprised by the fact that if you bank this industry correctly—you do the right things, make the investment, do all the things the regulators ask us to do—its been remarkably smooth. There is just not the friction or the push back that a lot of people would expect. The regulators just want to make sure we have a strong program and we are monitoring and measuring. We’ve had a great relationship with them.

You’ve set yourselves up as an early adopter in a still developing industry. How would you like to see it continue to evolve?

I have a unique perspective, because I served as secretary of commerce for the state Oklahoma for the last two years, in addition to being a banker and doing cannabis related banking. I have been very involved with cannabis-related legislation.

One of my good friends, Scott Fetgatter, is in the house of representatives and is a very active sponsor of cannabis legislation. We’ve worked very closely on a number of bills, and I will continue to be an advocate.

We are finding that in so many ways, there is a medicinal value to these products that is better than the pain killers that have been out there that are so destructive to our society. I think it’s so important that we look at the science and look at the facts and use logic instead of emotion and stereotypes as we make decisions to regulate this industry.

I think that the industry, like all industries, still needs to be regulated. We need to make sure there are the right types of businesses and businesspeople in this industry. I think Oklahoma has been at the forefront of all this, and we need to make sure that it is regulated properly to protect the state and the industry. There is a balance there, and I’m going to continue to keep advocating for that strong balance in our state.

Do you have any advice for cannabis startups and businesses?

It would be no different to the advice I would give to any business startup. You have to either find somebody with the background and experience or you have to learn it. We see this all the time. The greatest source of loan failure is because they got into a business that they did not understand. This is no different from any other industry. You just need to do you research, take your time, and make sure you understand what you’re getting into.

Don’t get into a business like this if you’re undercapitalized. You need to have adequate capital, and you need to do it the right way. You have to make sure you are following the regulations to a T. If you think you’re going to get in and skirt around the edges and not follow the rules, you’re just setting yourself up for tremendous failure.

I think there is a lot of potential in this, but every startup in every business is difficult. You got to have the financial backing, perseverance, and tenacity to make it work.

How do you think the industry is going to impact Oklahoma in the long run?

It’s going to be a huge industry within the state of Oklahoma. Our citizens voted it in, and I think our legislators are taking a very common-sense approach. I think they’re doing a great job.

We’re going to have growing pains. We’re going to have to work through those, but I think it will become federally legal within the next 2-3 years at most. I believe Oklahoma will be one of the country’s leaders in this industry. It’s a commitment we’ve made as a state, and I think the state is going to be very successful.

How can companies get in touch with you for cannabis banking services?

We are here to help. We’ve got a team of experts who study this industry every day. That’s what they do, and we would love to help.

Give us a call at 877-488-4790 and ask for our cannabis banking division.