Kevin Hart, CEO of GreenCheck – Interview Series

Even though successful cannabis businesses and brands expand to the million-dollar point where financial services are needed, it can still be a difficult journey to find reputable financial service providers. Luckily for those businesses and brands, one such company is diligently verifying which service financial service providers are both trustworthy and cannabis-friendly too. For more information on that process and the company behind such important efforts, mycannabis.com had the pleasure of speaking with Kevin Hart, CEO of Green Check.

Because the subject itself was still in its infancy, what topics in Computer Science did you mainly study at Southern Connecticut State University? Since that was before the major technological revolutions of the 1990s and 2000s, what concepts were mainly discussed in your classes?  

When I enrolled at SCSC, as it was known back then, I was much like every other 18 year old, not knowing what I wanted to do next. I emphasized political science (I thought I might want to be a lawyer) and mathematics, as I truly love the material.

It was when I took an assembler coding class that I became fully hooked on what was then called information systems. The practical use of math, enhanced by coded directions to make a machine perform tasks, was mind-blowing for me. I decided that if I was going to pursue this passion I should test the market so I applied for a job in a help-wanted ad in a newspaper. This was the late ’70s and I got hired. The trajectory was set for me!

In retrospect, what were the most useful graduate-level courses you received while attending Quinnipiac University? As someone who owns and operates his own business, which courses became the most applicable to your career? 

All the graduate level courses were relevant to my larger goals in life. The enhanced classes in computer sciences and international business courses helped me form how I could use the skills and knowledge to my planned career goals in technology enablement which had already started.

From my earliest days with multiple paper routes I was always focused on time and movement efficiencies, real OCD behaviors, so coding for business optimization only made that come out even more.

Every class, every business interaction is a learning moment. That was a critical learned lesson as well.

What were some notable roles you served prior to founding Green Check, and what were the most crucial lessons in proper management and company expansion that you learned during the first part of your career? It looks like the companies you’ve worked with are quite numerous and well-known. 

Well that is a tough one given my career has spanned 45+ years. In the earlier years I was so fortunate to have worked at Management Science America (MSA) which was the first global ERP provider.  Amazing company.  The leaders and mentors I was able to learn from were numerous and if someone was to do a six-degrees of separation chart on the genealogy of great tech companies you would find so many that have MSA DNA as their foundation.  I owe so much to those great leaders..MSA had the slogan “the customer is the key.”  We all wore lapel pins, tie tacks (suits were required) and that was more than a slogan.  It was the EXPECTATION, up and down the whole company.  It wasn’t a cliche, it was the culture and our customers made sure we lived it.I’ve always carried that forward to every leadership position I’ve held and it is also the reason why I turned down some very lucrative opportunities over the years.  It wasn’t a tenet of some of those companies so I wasn’t going to compromise my ethics or beliefs for the dollars.  We live this daily here at Green Check.  But don’t take my word for it, ask any, every single one of our customers.

What in particular inspired you to found Green Check Verified? What experiences with cannabis brands/companies did you have before the founding of Green Check? 

I love solving problems, especially complex data-driven puzzles.  I can “see” data as it moves between all the required nodes of operation so that is the foundational puzzle that Green Check solves.  Pulling together the wide and varied data sources, synthesizing the nodes, structuring the results for purposeful use and making sure it scales wildly, without a hiccup.  Anyone can tackle a flat surface puzzle, regardless of shape and number of pieces but when it is multi-dimensional, where the shapes, timing and rules change as do the required outcomes, that is a whole different level of complexity.  It all goes back to math, coding and driving efficiencies.  

This all really came to light for me at Industri-MateMatik (IMI) and Optum (the supply chain company) when helping global companies (Fortune #1 on down) manage their supply chains from raw materials to the consumers home.  Do you know how many people touch the cornflake that ends up in the bowl on your kitchen table?  You’d never complain about the cost of cereal again if you did and realized every person along the way had to make money.  The same thinking is applied here at Green Check.  The plant moves which means the money moves at the same time.  How can you optimize each touch point for financial and business services?  That is the driving force for everyone at Green Check.

From the experiences of the cannabis businesses that Green Check works with, what are the most common roadblocks that they usually face when attempting to get quality banking services? 

The answer has thankfully evolved over the past few years.  Having a deposit relationship is easy today, for any licensed cannabis business.  We have proven that with the 16,000+ businesses that are on our platform.  The better question is are they getting all the financial and business services they need to operate efficiently?   Green Check was never intended to be a deposit-only connector.  We work within a much larger connected ecosystem so that CRBs can use their operational excellence to get more services and at a much lower cost – all connected in a non-friction fashion.

Why are most large banks and similar financial institutions outright prohibited or very much against working with cannabis businesses? Is it because of the federal status of cannabis or other reasons as well? 

It isn’t about prohibition but more about education and awareness. Multi-state banks worry about the different regulations within each state, the cash handling aspect, and also the federal “status”.  I use the word “status” because while cannabis is federally illegal to sell, it isn’t federally illegal to bank.  THAT IS A FACT!

For the larger banks the phrase we have heard often is “the juice isn’t worth the squeeze”.  And to a certain extent, I understand that thinking, $500m, or even $1b in deposits doesn’t move the needle for some FIs if that deposit base is made up of 100’s of businesses.  But flip the script, how important is it to each of the businesses to have a banking relationship?  If you are a community bank or credit union, go back to your annual report or website and read it out loud.  If you use the word community ask yourself why you exclude a business that your state and/or local government gave a license to?  The question really needs to be asked to the people who say no because I see no reason not to serve them. 

How does Green Check verify that a financial institution is cannabis friendly, and how do those institutions get around the many federal prohibitions? 

There is quite a bit of two-way communication that occurs between the FI and us and this is integral to the process of having a solid program. Cannabis-friendly is a key attribute but we also want to ensure that the FI is cannabis capable.  It also centers around education, not just attitude, again bi-directional, and alignment of the FI goals in serving cannabis businesses.  A FI’s success is our success so when the reasons are understood and aligned, the rest candidly becomes easier.

As mentioned earlier, there aren’t federal prohibitions for the FIs but their policies, procedures and board alignment are critical as regulators will want to make sure the operations of the FI match the definition of the program and this has to be at the single dollar level, by business, for every transaction.  Alignment has many levels and definitions that need to be verified, together.  This is why we sometimes say no to a FI as odd as that might sound.  

How does The Forum platform further assist cannabis companies in finding financial services and employee benefits as well? 

We are very diligent about what companies and providers are within the Forum.  We put each partner through the same due diligence process that our FIs do with us.  None of the Forum partners are included strictly for financial reasons, they have to align to the purposes of Green Check and the quality our FI partners require. Non-negotiable.

All of this means that CRBs know that they are working with curated, vetted companies that respect that fact, and acknowledge in their services offering that good CRBs deserve better and most times cheaper solutions.  If anyone was to take a look back at the past 5 years of the 3rd party service provider that have left a trail of unhappy customers, wasted dollars and undelivered promises, we would have a new horror documentary – “The Zombie Bloodsuckers of CRBs – Visit the Graveyard of Dead Companies.”  It is almost Halloween so that seems appropriate.  

How could technology be utilized to get around the issues regarding compliance and other barriers that prevent cannabis companies from access to financial services? 

Not to be confrontational, but the phrase “get around” has been one of the issues for CRBs and therefore the reticence, for financial services to get engaged.  Everything has to be above-board, in alignment with the rules and regulations of the licensed CRB operation and that all needs to be independently verifiable.  Technology, as an enabler, can define, assist, monitor and verify every touchpoint to guarantee everything stays in line without “getting around” the requirements.  It is much easier to just play by the rules, and also much cheaper as the fines, penalties and possible loss of the license is never worth the risk.  Further, the proven operational efficiencies of staying in the lines is proven to be a competitive advantage across the entire operational touchpoints of any CRB.  The numbers don’t lie and the benefits are provable.

With a platform like The Forum being created, what does that mean for the future of maturing the relationship between financial institutions and cannabis businesses?

Both industries have moved past the feeling out stage.  Each month, we see broader and deeper relationships being formed between all of our clients.  It is actually quite heart-warming.  That is the purpose behind the Forum so that each relationship can become wider and deeper by capturing the attributes of what a CRB is looking for and how their FI partner has direct visibility to service that demand.  It enables a complete data driven “circular” connection for both sides and the supporting providers that the FIs and/or CRBs want to be connected to without having to start from scratch every time.  Time, data and research are costly, use what you have wisely to make the best connections possible.  All sides win – fairly!

Any CRB can join the Forum for free to look for the services they need, you don’t have to bank with a Green Check supported bank, we are open to all CRBs.  Each of the Green Check FIs and our Forum partners gets to capture that CRB demand with specificity.  For the FIs this is all managed via their Portfolio Management dashboard to help them drive their program growth.  It is truly the only connected, attribute and demand driven ecosystem for all parties.  Mic drop!  Again, efficiency and optimization with metrics make it all easier.

If cannabis were to be federally rescheduled to Schedule III, how would that impact the financial institutions you work with? How would their operations change and would the major American banks (BofA, Wells Fargo, Chase, etc.) finally be allowed to work with cannabis companies? 

We have had to deal with this question all the way back to the first days when the concept of Green Check was a war-room with thousands of sticky notes for how the platform would work.  The simple fact is that regardless of rescheduling and/or some form of SAFER Banking there will never, yes NEVER, be less regulations, there will be more.  Anyone who argues otherwise hasn’t studied history or understand how the federal government works. Some of the current regulations will ease but they will be replaced with newer requirements, some of which I would bet will be tougher, to monitor the entire supply chain of the plant.  Also the inter-agency dependencies that will be required at the federal level, along with the variability of the uniqueness of the state programs, will continue to exist with additional layers of complexity. 

This is where Green Check is uniquely and singularly qualified to keep the connections and data analysis between all the nodes humming along.  Because we have a 100% compliance posture, at the individual transaction level, we can easily upgrade our technology as needed.  This has been proven every time with each new state or program change.  Anyone who says or thinks otherwise is going to be in for a big surprise when the changes come.  Also we never charge extra for new states or types of licensed businesses, that is a horrible customer experience.  If a company has to do that it simply means they have to build something new.   As for the big banks, who really cares?  The cannabis industry isn’t going to be better served by any of those names.  They offer nothing that isn’t available today for CRBs with community FIs and wouldn’t you rather have a relationship with someone who wants to have one with you?

Thank you for joining us, Kevin! For more information on Green Check Verified, please visit its website.