"For cannabis businesses, this means that access to the basic financial products like checking and savings accounts can be elusive," John Hudak, a senior fellow at the Brookings Institution who studies issues pertaining to marijuana legalization, told Business Insider. Tyler Beuerlein, a VP at Hypur, an Arizona-based fintech startup that acts as a middleman between banks and cannabis companies, told Business Insider that he believes there are "less than 30" banks willing to do business with the booming cannabis industry in the US. Because of a section of the federal tax code that doesn't allow cannabis companies to deduct business expenses, these startups end up paying an effective tax rate "3.5 times higher than their neighboring businesses," Keegan Peterson, the CEO of Wurk, a Colorado-based payroll and compliance firm, told Business Insider. It puts equity applicants and small business owners in a position where "it's almost impossible for them to keep majority control of their company," Krane said, "because they don't have that access to institutional lending where they could just get a loan and do this on their own and keep a larger chunk of that business."
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