EXCLUSIVE: Dama Financial CEO Discusses Present And Future Cannabis Commerce & Banking

Cannabis supporters and companies have their fair share of drama around commerce and banking issues. And while the Senate Banking Committee's recent approval of the SAFER Banking Act was “a huge step forward in the right direction” that will help financial institutions feel better as it comes closer to legitimizing the industry, says Dama Financial’s CEO Patrick O’Boyle, there are still many challenges. 

Dama has helped community banks to get into the market and has serviced the cannabis industry since 2017. It is now acting as a “full-stack” provider of complete seed-to-sale POS consumer payments and financial capabilities for one integrated system for dispensary, wholesale and fully vertically integrated cannabis companies.

Their business still faces both state-to-state and federal regulatory and compliance issues, and more generally the support and understanding of the operations of cannabis businesses, O’Boyle told Benzinga’s cannabis managing director, Javier Hasse, during a conversation at September’s Cannabis Capital Conference in Chicago.

Consumer & Interstate Payment Foreseeables

Cannabis consumers will very likely still pay by cash, so the deal remains to help businesses have cost-efficient ways to work within what he calls a “multi-prong” approach toward getting “as close to walking into any retail environment as possible.”

This includes providing multi-state type capabilities so that large operators can have a “ubiquitous” banking and payments platform, or cyber wallet capability for a terminal-based solution.

“All of the above, because we don't know how this industry is going to change,” O’Boyle says. Until there are more operationally electronic payment institutions involved, he anticipates cash is going to be “the one that you can count on,” which represents some 50% of money volume as well as ACH as a sort of “isolation layer” from bank accounts. 

For vertically integrated wholesalers, he recommends having a “highly integrated” system from backend to frontend, to ease inventory management and make train transfers between locations. 

For banking, operating in several states today requires having different banking partners because of the different regulations, holding numerous accounts in a “very costly, very cumbersome” management.

He hopes more states will model Missouri and Southern states’ “less is more” approach. “I think the state governments are doing this much, like they did in gambling or liquor, for tax income.”

Other regulatory elements that help include non-punitive licensing costs, low taxes and also, “trying to listen to operators rather than just putting bills out there from legislatures” so as to actually get the net outcome wanted -sustainable growing tax revenue.

In five to 10 years from now, will things be more simplified? “Again, we're going to need some help on the Hill to really make this so that it's more like walking into the corner shop and doing a transaction than it is this unique bubble wherein we have to reinvent everything that is already out there everywhere else.”

Photo: Benzinga Cannabis Capital Conference