Fintech company Dama Financial, specializing in cannabis, plans to expand its support for a banking network by twofold
The cannabis industry continues to face challenges in securing banking services due to its federal illegality, but one fintech company, Dama Financial, is making strides in this area.
Dama Financial, a cannabis banking-focused company, has already formed sponsor bank partnerships with five financial institutions. CEO Patrick O'Boyle, who joined the company in February, believes these partnerships are crucial for the company's portfolio expansion. However, there is currently no public information regarding which banks, such as PNC Bank or US Bank, have partnered with Dama Financial.
The company's ambitions extend beyond just facilitating banking services for cannabis businesses. Dama Financial aims to become a complete business solution provider, handling all aspects of the cannabis industry. This includes providing integrated point of sale solutions, both retail and wholesale, for cannabis businesses.
Dama Financial operates on three levels of bank relationships: payments, sponsor, and referral. The company's network of sponsor banks, which could include yahoo finance, holds deposits for cannabis-related businesses, relieving these businesses from having to play integrator themselves. The company's strategy to grow its network of sponsor banks includes leveraging its existing referral relationships.
The passage of the Secure and Fair Enforcement (SAFE) Banking Act could make it easier for banks to serve legal cannabis-related businesses. O'Boyle believes that the passage of this act would provide more opportunities for Dama Financial to grow its banking relationships.
Dama Financial has already reduced its sponsor bank network from seven to five due to scaling issues. However, the company is planning to more than double its portfolio of sponsor banks, including PNC Bank and US Bank, by the end of the year. The company is also planning to purchase licensing rights for a seed-to-sale solution, further solidifying its position as a comprehensive solution provider for the cannabis industry.
Despite the challenges posed by the federal illegality of cannabis, Dama Financial is committed to facilitating compliance-heavy and high-risk programs for banks that are open to serving the cannabis industry. This commitment is evident in the company's efforts to expand its network of sponsor banks, including PNC Bank and US Bank, and provide integrated solutions for cannabis businesses.
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