Kevin Hart, CEO & Founder of Green Check Verified – Interview Series

Kevin Hart is the CEO and Founder of Green Check Verified, a regulatory software and services company that focuses on the intersection between community banking and the emerging legal cannabis industry. GCV aims to provide the services and tools needed to connect these two industries in compliant and profitable ways.

Kevin brings four decades of enterprise software experience as part of his founding vision for Green Check. He has worked in the C-Suite for a variety of software companies with global clients and partners, and he has led two companies to successful exits with publicly traded companies, as well as another to an IPO. With decades of experience at the helm of venture backed companies, Kevin has brought together an unmatched team to help him lead Green Check to its leading position in the cannabis financial services market.

What attracted you to the legal cannabis industry?

After four decades in enterprise technology, it’s funny to think that what truly led me to the cannabis industry are the iPads in the airports that you see across the US. I worked on that project when I was running the largest independent Apple dealer in the world, a company called Tekserve in New York City. I was approached to build a point-of-sale system based on the model of the iPads in the airports, because back in 2015, when you went to the dispensary, you didn’t know what was available, the different modalities, etc.

Soon after, I began spending a fair amount of time flying around the country, meeting with cannabis companies, and getting to understand their business models. I found that the more I worked with them and the more I understood their operations, I kept hearing about the banking challenges that these companies face when trying to scale their businesses.

What is the genesis story of Green Check? 

It was during my time working with these cannabis businesses that I realized I wanted to solve the complex problem they were facing when it came to banking. I wanted to figure out how to take two highly regulated industries that would love to work together, (cannabis and then banking and financial and business services) and connect them. Connecting these two industries and enabling them to build sustainable and mutually beneficial relationships became the business process puzzle we set out to solve.

How would you describe what Green Check is in one sentence? 

Green Check Verified enables financial institutions to safely and successfully offer services to the legal cannabis industry by utilizing best-in-class technology solutions and advisory services.

Banking is one of the bigger pain points in the legal cannabis industry.  Can you tell us a bit about the banking solutions Green Check offers? 

Today, we’re seeing that cannabis-related businesses (CRBs) are mainly struggling with payment systems and accessing the financial services they need to grow. Whether it's setting up a checking account, using an online banking platform, establishing credit systems, or handling cash, these are all some of the historical challenges to growth.

The purpose and mission of GCV is to build trusting relationships between U.S. financial institutions and legal cannabis businesses while creating solutions that minimize the time, cost, and risk required to maintain compliance. Through our technology and expert advisory services, we enable our bank and credit union partners to offer the best products and services on the market to CRBs.

One of the other big pain points in regulation.  Can you tell us a bit about the regulatory hurdles that new businesses face? 

Banks and credit unions that want to serve the industry have to comply with the guidelines created by FinCEN, which includes examination and mandatory reporting on cannabis banking activities.

Beyond regulation, another pain point is high tax rates, which we are seeing impact California. This is something the governor has sought to address in his most recent budget – and the illegality of cannabis in other states making it attractive for California growers to grow and send to other states without legal programs.

On top of this, we're seeing supply chain issues plaguing the cannabis industry, whether it's materials for cannabis smoking devices or the high cost of indoor farming in states not suited for growing cannabis.

Operating in the legal Cannabis industry can be very tedious and precarious.  Green Check offers a lot of other options to ease the burden that cannabis businesses face when they are launching.  Tell us a bit about your favorite solutions that Green Check offers to new businesses.  

Our favorite solution is education. When we start to work with FIs it is important to know where the business is at on its cannabis compliance journey. The technology is always there, and CRBs can use our platform (access is free) to instantly and automatically upload their transactions. The best goal for an FI is to understand the cannabis industry, opportunities, shortcomings, and build a program that will ultimately enable a business to operate at the peak standard of compliance.

At Green Check, we frequently host webinar sessions and publish helpful content that aims to provide insight and guidance to stakeholders in our industry. We pride ourselves on our education programs and feel they are an extremely valuable resource for our customers.

Can you tell us some of your best solutions for scaling up businesses that are already established and operational? 

The challenge with some established operations is how they began their operations.  Did they pay attention to and plan for how they would adhere to the compliance and regulations?  Sometimes this requires new ways of thinking and systems, so we integrate with any POS to support the documentation of transactions and compliance required for banking. CRBs and FIs alike can’t scale their banking relationships and are often using spreadsheets, manual labor, and endless filing to deal with their compliance needs.  Efficiency is required, and that is where Green Check really shines with our connected platform.

Green Check connects directly to all of the leading CRB invoicing, inventory, and point of sale systems to automate the verification of cannabis funds, and our experts are up to date on the legislation and regulations to ensure that FIs are properly able to navigate the complex world of cannabis banking.

We have seen FIs struggling to manage even up to 10 CRBs per full time employee before working with us and implementing our banking program and tech solutions, and now these same FIs are able to work with 80+ CRBs per FTE. It's about agility, accuracy, and efficiency when it comes to compliance.

Can you tell us a bit about the financial institutions you work with and the process?

We have helped set up cannabis banking programs at some of the largest financial institutions in the US, such as Valley Bank. Typically, when we begin working with a new customer, Green Check will come in and review how the FI has been handling its current cannabis programs, and then help to establish policies and procedures to better suit the CRB clientele going forward. From there,  we provide ongoing expert guidance and a suite of tech solutions that enable them to confidently implement and establish new cannabis banking programs.  Our approach is seamless from start to finish, allowing both sides of the equation to scale and grow as part of their relationships, which means they do not have to do anything different than a “normal” business to banking relationship would.

Green Check is solely based in the US, are there plans to expand to the legal Canadian market?

We will not only be expanding to Canada, but we have taken the soon to be needed requirements (Washington can’t stall progress forever) to accommodate interstate and international commerce. The changes are coming, which is why it is important to architect any solution and program to be able to scale and adapt as the markets dictate. These requirements will become real, and soon, so manual programs and the businesses that are relying on them today will need to be upgraded.

How do you see the legal cannabis market in 5 years?

The cannabis market is growing and only getting bigger, and mainstream acceptance is at an all time high. Right now, there is a tremendous opportunity for the cannabis industry as there are strong legalization bills on both sides of the aisle, in both the House and the Senate, that address the issue from multiple angles. We also expect to see interstate and international commerce become part of the expanding regulatory and compliance landscape, as well as more opportunities for CRBs and participation from more indirect cannabis businesses, such as payment systems and loans.

Right now, there are millions of dollars being put into loan programs for cannabis businesses, and this is thanks to the reduction of risk due to the breakthroughs and programs that were established in the last few years. Additionally, interstate and international commerce will open up in the future as national and federal legislation continues to develop. This is going to reduce the strain on the cannabis market as new routes will open up for production. For example, being able to tap into Mexico’s vast cannabis producing abilities will be big for the industry.

Is there anything else you would like to share with our readers? 

Begin with the end in mind. It isn’t just a phrase; it should be the method by which any FI should approach this new line of business. We have seen dozens of manual programs or less than “fully-baked” tech solutions have to be revamped due to not fully planning for success. Make sure that you:

• Are building a program, not running a series of projects.
• Plan for today, and tomorrow so your program can scale and accommodate any changes, and not have to react and revamp everything.
• FIs rely on data for all other lines of business. Identify your data needs and find someone who can get you what you need, not only what they tell you they have.
• Don’t confuse “cost” with expense, especially as the cannabis market is evolving.  Fundamentals matter, think bigger and longer term as to what is relevant and sustainable, not a cheap starting point today.

Thank you for the great interview, readers who wish to learn more should visit Green Check Verified.