Federal banking laws have created more than just an isolated crisis for Arizona’s multi-billion-dollar marijuana industry. They’ve created a dangerous problem for the state of Arizona.
Banking laws make it nearly impossible for cannabis dispensaries to obtain basic financial services such as a checking account. As a result, a multi-billion dollar legal Arizona industry is forced to operate in all cash.
Imagine driving around tens and even hundreds of thousands of dollars in cash to pay vendors, landlords, suppliers, and utility bills. Imagine a legitimate business taking in millions in all cash that cannot be deposited in a bank account and must be stored on-site. This is the grim reality for cannabis dispensaries.
I am the co-founder of ALTA, an Arizona startup created to address this state-wide problem. We owe our creation to Arizona Attorney General Mark Brnovich’s innovative FinTech Sandbox program. The Sandbox program allows start up financial technology companies like ALTA to test our product while we obtain licenses and regulatory approval.
It provided a degree of certainty as we navigated the road to approval. We are proud to report ALTA has officially launched and has successfully exited the Sandbox.
I believe the Sandbox represents a commitment from Arizona to foster innovation. We are a leading example. It’s a unique problem-solving partnership between the public sector and the private sector.
ALTA is excited to offer a solution to an unfair situation faced by Arizona’s voter approved marijuana dispensaries that simply needed a safe and secure way to operate their legitimate businesses. It is a digital payment network where cash intensive businesses pay each other using digital tokens instead of cash. No bank account is required to use ALTA.
And while the lack of clarity rooted in federal banking laws may have caused this problem for legal cannabis dispensaries, our goal is to make Arizona an example of how to solve this problem nationwide. We plan to expand into other states as we increase our employee roster. We will proudly say that we were born and raised in Arizona.
And I suspect that is one of the reasons why the Sandbox program was created. It can indeed make Arizona a center of the financial technology industry, an industry with plenty of room for growth. That’s more jobs, and more tax dollars for our state.
Stories about government red tape and excessive regulation impeding new business creation are nothing new. It is encouraging to know that Arizona is changing that narrative on multiple levels.
Earlier this year, the Arizona Department of Health Services executed a swift and sane roll out of recreational marijuana just months after it was approved by voters. Now our Attorney General has helped foster a way for these legal dispensaries to solve what was a highly problematic financial services challenge for the industry and a safety concern for the state.
ALTA is proud to be part of these positive narratives. And we look forward to serving Arizona, and an emerging Arizona industry for years to come. Safely. And smartly.
Editor’s Note: By Sarah Wessel is co-founder of ALTA.