Denver-based fintech company Würk is coming up with creative ways for the cannabis industry to overcome the massive banking barriers that come with operating in a federally illegal framework, reports MarketWatch.
Unexpected tax refunds
One example? So far, most COVID-related tax breaks and benefits have been largely unavailable to the industry thus far. But CEO Scott Kenyon says that a partnership with ETaxbreaks has allowed them to access the Covid Employee Tax Credit — which can add up to $33,000 per employee.
“It’s like getting a refund check from the IRS when you don’t expect it,” says CEO Scott Kenyon, who says the credit is payroll-oriented, rather than income-based. “We’re spending more time on finding these types of situations…we have a lot of services coming up.”
Tried and tested
Kenyon says the payroll, tax and compliance-focused company, which currently has 90 employees, has already tested the program to ensure it’s an effective strategy. As a result, they’re preparing applications for “dozens” of companies.
SAFE business model?
It’s uncertain just how long there will be a demand for creative finance companies catering to the cannabis industry. While states continue to legalize, there isn’t much movement on the federal cannabis reform front.
On the other hand, the SAFE Banking Act — which is arguably languishing — could lift many federal banking restrictions in one fell swoop.