SEATTLE–Shield Compliance LLC, the developer of a banking compliance system for the legalized cannabis industry, announced it has raised $5 million in a Series A financing round and plans to bring its services to financial institutions serving legal cannabis markets in Michigan, Colorado, Illinois, Massachusetts, Ohio, and Washington.

Combined with a partnership with a multi-state payroll processor, the company now serves all states with legalized cannabis sales programs.

Building on a $5 million seed round in March, the funds will be used to support the continued development of the Shield Data Hub (https://www.shieldbanking.com/shield-data-hub) while increasing the pace of deployment at financial institutions across the United States.

“Shield Compliance offers a complete and secure platform built for bankers by bankers,” said Scott Walker, fund manager of Copia Investments, a growth venture equity firm focused on services and software within the financial technology industry. “Under the direction of the company’s experienced leadership team, Shield is gaining strong traction in legal cannabis states and is quickly becoming the clear choice for the banking industry.”

Added Shield founder and CEO Noah Carey: “It reflects our core belief that the cannabis industry must have access to banking services, and that our purpose-built solution meets the compliance requirements of this industry while enabling financial institutions to operate efficiently and effectively.”

The Shield Data Hub is a central component of Shield’s cannabis banking platform. It works by aggregating financial institutions’ transaction data and demographic records with restricted and publicly available information from state and local governments, seed to sale tracking, and client financial statements. This automated approach allows banks and credit unions to streamline compliance and scale their operations while accessing new sources of low-cost deposits and gaining a first-mover advantage on MRB customers.

“Despite the ongoing conflict between state and federal law, a pathway exists for financial institutions to serve the cannabis industry and pass compliance exams,” said Tony Repanich, president and COO of Shield Compliance. “Shield is rapidly expanding its footprint serving banks and credit unions in legal cannabis states, helping them improve compliance outcomes, better manage risk, and drive down operational costs.”

Today, some form of medical or recreational marijuana is legal in 33 states, representing approximately 95 percent of the U.S. population. As more states pass legalization measures and federal cannabis legalization and banking policies gain support, demand for banking services is growing.

In Michigan and Illinois, legal recreational cannabis programs expected to generate millions of dollars in new state revenue are slated to go online Dec. 6 and Jan. 1, respectively. Only a few financial institutions in each of these states, however, are offering services to cannabis businesses. Ohio, which has a robust medical marijuana program, may only have two financial institutions serving this market. In mature cannabis states such as Colorado and Washington, banking competition for top-performing cannabis businesses is escalating rapidly.

While increased competition will result in lower fees, the costs to financial institutions serving these customers will remain relatively unchanged. As a result, many bankers are seeking to improve the efficiency of their compliance efforts as they launch new cannabis banking programs.

For more information, visit https://www.shieldbanking.com or contact info@shieldbanking.com.