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Can Cannabis Help Cure Government and Bank Revenue Shortfalls?

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Can Cannabis Help Cure Government and Bank Revenue Shortfalls?

By Andy Montgomery | Published July 1st, 2020

As COVID-19 again rises its ugly head amidst an opening of economies around the United States, it is becoming increasingly clear that a snap back of the economy is a naïve notion at best.  Americans will be living with this unwanted new normal for some period of time to come.  The aftermath remains uncertain, but the present is already having significant effects on our economy and way of life.  Government stimulus, which comes at a long-term cost, has provided a boost of adrenaline, but will eventually wear off. We are in the midst of a financial recession and there are no clear precedents to draw on which provide a guide to its severity or longevity. This means that both governments and banks need to find alternative sources of revenue.

SAFETY DRAINS REVENUES

Different from “the Great Recession” which began in 2008, this economic crisis will be far more impactful to Main Street businesses and not contained to an asset bubble.  Consumers just simply stopped all at once from popping into local businesses and, even with moderate openings, many retailers and restaurants have no chance to recover to pre-COVID conditions.  Add to that, virtual learning behaviors that are quickly being integrated as preferences in our daily lives. This lack in demand will work its way through various other supply chains and continue to wreak havoc on our economy for some period of time.

The impact of decreased tax revenues from Main Street economies is already being felt in municipalities and states around the nation.  It comes at a time in which they are already tasked with providing for the safety of citizens through extraordinary and costly measures.  This is quickly depleting the reserves of governments; most of which have no good alternatives to raise revenue.

BANKS HAVE AND WILL BE IMPACTED

Similarly, banks have only begun to feel the full impact of the crisis.  In the first quarter of 2020, bank revenues were down a whopping 70%.  Banks will certainly see some revenue boost as a result of the massive PPP effort, but the stimulus will wear off for them also.  Almost every commercial business in the country has been negatively impacted by COVID-19 and that will work its way into banks’ lending portfolios, earnings and liquidity.  The building momentum in the third and fourth quarters of credit contractions and bank layoffs could be as significant as 2008.

CANNABIS TAX REVENUES REQUIRE SAFE BANKING

One source of revenue that is yet to be adequately optimized in the 33 states that have approved some form of legalized cannabis is maximizing the tax revenue from this growing industry.  Most state and local governments are collecting a fraction of the tax revenue that they intended from cannabis.  That is mostly because the illegal trade of cannabis is in full supply and provides harsh competitive pricing pressure on businesses that want to comply with the laws and regulations.  Law enforcement will readily admit that they do not have the financial resources or public will to put a dent in the illegal trade.  This keeps legal cannabis from operating at their optimum potential and from paying the tax revenues that are increasingly needed by state and local governments.

During a press conference in April 2020 New Mexico Governor Michelle Lujan Grisham (D) stated that she wished the legalization of recreational marijuana would have passed earlier this year as it would have offered additional revenue for a state with limited resources and a large outbreak of COVID-19. “If there was ever a time for wishful thinking, I wish we had passed recreational cannabis because that would be $100 million.”

Also in April, the U.S. Virgin Island Governor Albert Bryan Jr (D) began the process of revisiting cannabis legalization stating, “We have taken the time to gather further public input as well as address the concerns of the individual legislators,”…“As the economic disaster, the last few weeks has created has affected the [Government Employees Retirement System] greatly it is our hope that we can have a greater sense of exigency in implementing all the things that can help us regain solvency.”… “Certainly, cutting the annuity of retirees by 30 percent cannot be the path,” he said.

IT IS A LAW ENFORCEMENT ISSUE

One way around relying on law enforcement to clean up the cannabis businesses is to have the banks do it.  That is why 34 Attorney Generals from states and territories across the country have signed a letter to Congress in support of the cannabis “Safe Banking Act.” But, as cannabis is still illegal federally, banks have no clear mandate or rules to follow from federal regulators to safely bank cannabis.  However, according to FinCEN data, approximately 525 banks and 185 credit unions knowingly banked cannabis clients in March 2020.  The Chairwoman of the FDIC, Jelena McWilliams, gave a clue as to how the federal regulator of banks would feel about their members banking cannabis as she has integrated the topic in all of her recent speeches and said that regulators would be okay with its members banking cannabis as long as they followed the FinCEN guidance and state regulations.

Denver, Colorado’s Audit Committee released a report stating, “The Treasury Division’s Audit Unit Is Not Effective or Efficient at Ensuring All Marijuana Taxes Are Reported and Paid.” The audit also lists specific findings and recommendations.

Recently, Colorado’s Attorney General Phil Weiser tweeted, “Crimes at #cannabis businesses are often driven by the fact that so many of them are all cash businesses. That’s why we led a coalition of State AGs to support @RepPerlmutter’s work on the #SAFEBanking Act, allowing such companies access to safe banking.”

COULD THIS BE A WIN-WIN?

The bottom line is that if banks capitalized on the nascent and growing cannabis industry it could add liquidity and profit at a time when they need it the most.  To safely bank cannabis they would need to vet the businesses and ensure they are complying with all of the laws and regulations, But, by integrating more cannabis related businesses into the banking system and migrating them away from dealing in an all cash world, the money goes directly into the economy and adds very inexpensive deposits and a new source of fees for banks.  It also makes those cannabis related businesses that are not legal and compliant,recognizable outliers that are easier to spot for law enforcement as they will continue to be forced to trade and live using all cash. 

Andy Montgomery is a former bank CEO with more than 25 years of experience in the financial services industry.  His experience includes founding community banks and working in executive positions for regional and money center banks.  He currently is the founder and CEO of HDCS, Inc., which provides consulting for financial institutions in engaging with higher-risk depositors.

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Andy Montgomery is a contributing writer for Inland Empire Business Journal and former bank CEO with more than 25 years of experience in the financial services industry. Experienced Community Bank CEO and CEO and Founder of HDCS. Inc. and CBFS. HDCS (Higher-risk Deposit Compliance Solutions) provides comprehensive compliance solutions for financial institutions that engage with higher risk depositors including Cannabis Related Businesses and Cryptocurrency Businesses.

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GreenRock Capital and J.P. Morgan Close $103 Million Tax-Exempt Financing for Ontario Hotel and Conference Center

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May 14, 2026

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GreenRock and J.P. Morgan Deliver $103 Million in Tax-Exempt C-PACE and Mortgage Revenue Bond Financing for National CORE’s Hyatt Regency Ontario

GreenRock Capital LLC announces the close of a $103 million financing for the Ontario Airport Hotel and Conference Center in Ontario, California. The $103 million package pairs $26 million in tax-exempt C-PACE bonds with $77 million in tax-exempt mortgage revenue bonds, all underwritten by J.P. Morgan and placed with municipal bond investors.

“This innovative and successful transaction was a result of a true team effort, and we are thrilled with the outcome for all,” said Matt Smith, Principal at GreenRock Capital.

National CORE owns the property, which is being transformed into the Hyatt Regency Ontario through a comprehensive renovation and repositioning effort. Financing proceeds will support the redevelopment of the existing 309-room hotel into a 295-room upscale Hyatt Regency destination featuring expanded suites, a redesigned lobby experience, upgraded food and beverage offerings, a new Club Lounge, more than 16,000 square feet of meeting space and fully renovated guestrooms and common areas.

“This transaction reflects the confidence investors have in both the strength of the project and the experienced team behind it,” said Robert Diaz, Executive Vice President of National CORE and project lead for this effort. “We are grateful to GreenRock Capital, J.P. Morgan, and our partners for helping bring this transformative vision to life. The overwhelming response to the offering reinforces the long-term potential of this property and its impact on the Inland Empire.”

Located near Ontario International Airport, Toyota Arena, and the Ontario Convention Center, the hotel sits at the gateway of Ontario and Rancho Cucamonga and is positioned to become a premier hospitality destination for business and leisure travelers throughout the Inland Empire.

“This financing reflects what is possible when a strong sponsor, creative capital partners, and disciplined execution come together around a compelling project,” said Keaton Yellin of JLL Capital Markets, which arranged the financing.

“The financing structure for this project represents an innovative approach to capitalizing hospitality assets in today’s market,” said Fred Schuster of FGS Realty Advisors, who assisted the Sponsor with the transaction.  “By combining tax-exempt C-PACE with tax-exempt mortgage revenue bonds, the team was able to deliver a compelling financing package that aligns long-term capital with a transformative hospitality investment.”

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Morongo Invests in Inland Empire Sports and Entertainment with New Baseball Partnerships

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1 month ago

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April 6, 2026

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Deal with Ontario Tower Buzzers and Rancho Cucamonga Quakes strengthens community engagement and fan experience

The Morongo Casino Resort Spa, the Ontario Tower Buzzers and the Rancho Cucamonga Quakes have announced a new partnership by which Morongo is now the presenting sponsor of the Tower Buzzers and the official field naming sponsor at the Quakes’ Epicenter Stadium.

Under the multi-year agreement, Morongo is now the “presenting sponsor of the Ontario Tower Buzzers,” the new Minor League affiliate of the 2025 World Series Champion Los Angeles Dodgers. Additionally, the home of the Quakes has been renamed the “Morongo Field at the Epicenter” strengthening Morongo’s connection to sports fans across the Inland Empire.

The innovative collaboration marks a fresh advancement in the Morongo Casino’s ongoing investment in entertainment and recreation in the Inland Empire.

“Baseball is America’s pastime because of its power to bring people together,” said Morongo Tribal Chairman Charles Martin. “We are thrilled to join with the Ontario Tower Buzzers and the Rancho Cucamonga Quakes to celebrate this tradition while creating new opportunities for families across the Inland Empire to enjoy the excitement of the game.”

“At Morongo Casino Resort Spa, our brand is built on delivering exceptional guest experiences centered on entertainment, excitement, and memorable moments,” said Mike Bean, Chief Executive Officer of Morongo Casino Resort & Spa. “Partnering with the Ontario Tower Buzzers and the Rancho Cucamonga Quakes reflects that same commitment as our three organizations work to create energy, community pride, and unforgettable experiences for fans.”

“This partnership is a great example of what makes Minor League Baseball so special — bringing together strong community partners, great organizations, and unforgettable fan experiences,” said Diamond Baseball Holdings West Region Vice President Ben Taylor. “Morongo’s commitment to entertainment and community aligns perfectly with our vision for both the Ontario Tower Buzzers and the Rancho Cucamonga Quakes. We’re excited to see this collaboration elevate the experience for fans across the Inland Empire.”

The partnership debuted during a pair of special events celebrating the start of the 2026 season.

  • On April 2, Morongo joined the Ontario Tower Buzzers for the ribbon-cutting ceremony for the beautiful new ONT Field, which was followed by the ball club’s first-ever season opener before a sold-out crowd as the team took flight on its inaugural season.
  • On April 3, fans enjoyed Morongo Diamond Nights where the Rancho Cucamonga Quakes unveiled Morongo Field at the Epicenter during a special game-day celebration.

The Ontario Tower Buzzers brand reflects the city’s proud aviation heritage and its close connection to Ontario International Airport. The team’s name and their mascot, Maverick, evoke the adrenaline and daring of aviation’s most thrilling flybys while celebrating the airport control tower that has guided thousands of flights into Ontario. Inspired by that spirit of precision and innovation, the team’s name captures the city’s can-do attitude.

Launched in 1993, the Rancho Cucamonga Quakes have been one of Minor League Baseball’s most beloved franchises, building a loyal fan base and a reputation for family-friendly entertainment at the Epicenter. As the Minor League affiliate of the Los Angeles Angels, the club has earned three California League championships (1994, 2015 and 2018) while creating lasting memories for local baseball fans. The newly named Morongo Field at the Epicenter marks an exciting new chapter for the ballpark and the community that has supported Quakes baseball for decades.

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Unisource Solutions Grows Its Inland Empire Presence with the Addition of TOTALPLAN Business Interiors

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2 months ago

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March 12, 2026

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Southern California’s leading workplace design and furnishings resource deepens its regional presence by uniting with a 57-year Inland Empire institution. 

Unisource Solutions, California’s Haworth Best in Class dealership and a comprehensive  workplace design resource, has announced the acquisition of TOTALPLAN a fixture of the  Inland Empire business community since 1969. The strategic partnership brings together  two organizations with a combined heritage of more than 80 years of expertise, unifying  their complementary strengths to better serve businesses, architects, and interior  designers across the Inland Empire. 

Founded in 1987, Unisource Solutions has built its reputation as far more than a furniture  dealer. The company operates as a full-service design resource — offering space planning, workplace strategy and analytics, installation services, project management, and custom furnishings through its in-house brand, Platform by Unisource Solutions. With access to more than 300 manufacturers, Unisource serves clients across corporate, healthcare, higher education, and financial sectors. 

TOTALPLAN has spent more than five decades cultivating trusted relationships with  businesses of all sizes throughout the Inland. Under the leadership of owner Denny  Fosdick, TOTALPLAN earned a reputation for quality service, community investment, and a deep understanding of the regional market. 

“For over 57 years, TOTALPLAN has been dedicated to providing exceptional workspace solutions throughout the Inland Empire and beyond. Now, we’re excited to join forces with Unisource Solutions. This partnership brings together our deep community roots with Unisource’s extensive resources and capabilities. I’m proud to pass the torch to a fellow Inland Empire resident who understands this community and will carry on the legacy we’ve built here.”  —Denny Fosdick, Owner, TOTALPLAN Business Interiors 

Jamal Nasserdeen, President of Unisource Solutions, who grew up in the Inland Empire,  expressed the personal significance of the acquisition and its implications for Unisource’s  long-term growth strategy in the region. 

“Growing up and living in the Inland Empire, it’s a true honor to build on the tremendous 57-year legacy that Denny and his team have established. This partnership marks a pivotal moment in our growth journey, significantly expanding our capabilities throughout the region and strengthening our position as Southern California’s premier workplace solutions provider. It’s a privilege to bring TOTALPLAN into the Unisource Solutions family.”  — Jamal Nasserdeen, President, Unisource Solutions 

The partnership also carries the endorsement of Haworth, the globally recognized  furniture manufacturer for which Unisource holds its Best-in-Class dealer designation.  Tom Peyton, Haworth’s Regional Vice President for the West Region, noted that the  partnership reinforces the strength of Unisource’s regional coverage and honors the  trusted relationships TOTALPLAN has spent decades building. 

The combined organization now brings a unified offering across workplace design, multi brand furniture sourcing, custom fabrication through Platform by Unisource Solutions,  and comprehensive facilities services including delivery, installation, reconfiguration, and relocation support. Clients across architecture, interior design, and corporate facilities teams will benefit from a single, deeply resourced partner capable of supporting  projects from initial concept through move-in. 

For businesses in the Inland Empire seeking to transform their workspaces, the new  partnership signals expanded local access to a nationally capable team, one that is deeply  invested in the communities it serves. 

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