Bridge West Consulting had an opportunity to speak with Todd Sherer, First Vice President with Valley National Bank. Valley National Bank has been serving the cannabis industry for over a year and is one of the largest national banks serving the cannabis market.
What is your background in the Cannabis industry?
Todd Sherer, First Vice President with Valley National Bank, joined Valley National in 2021 to help grow their cannabis practice. As an integral member of the bank’s cannabis banking team, Todd and his colleagues serve a wide range of cannabis clients nationwide. Prior to joining Valley National Bank, Todd ran business development for 13 years with a non-bank lender in New York City.
About eight years ago, Todd started a second line of financing for the cannabis industry, and he provided debt facilities to a wide variety of customers in the cannabis space. Todd provided financing to many companies in the industry including vertically integrated operators, extraction companies, and ancillary businesses.
As a panelist for many major cannabis events over the past few years, Todd regularly shares his expertise and knowledge about financial issues impacting the cannabis industry.
Valley National Bank has been serving the cannabis banking industry for a little over a year and a half and the bank is quickly positioning itself as the leading bank serving the cannabis market. Todd’s goal is to grow the bank’s presence in the cannabis industry. Valley is now offering deposit relationships to cannabis companies nationally and is currently banking some of the largest companies in the U.S. The bank is offering these services to license “hopefuls” in the NY Tri-state area as well as some the most prominent companies in the industry. Additionally, Valley offers a service called ‘Concierge Banking’ to their cannabis customers. This offering comprises a dedicated team of cannabis-focused bankers who have deep industry experience, providing customers with higher-level services. Since Valley National Bank is one of the largest national banks working in the cannabis industry, they support cannabis operations in multiple states. Customers receive one login portal and one site to visit, which simplifies the process of operating nationally and moving money from one account to another, or one state to another. Most large commercial enterprises are accustomed to all the commercial banking services available at Valley National Bank, which has been a “game-changer” in the industry. In addition to banking, Valley National Bank also provides some lending, but mainly financing as it relates to real estate for their customers. They are looking to offer more for their customers as time goes on.
Recently, Valley launched Valley Pay, a digital payment solution for the cannabis industry. Valley is constantly looking for new ways to service the cannabis industry.
What challenges do you see in banking and financing for the cannabis industry, and how can you and Valley National Bank address them?
Overall, the challenges in the cannabis industry have changed over the years. Todd mentioned that he consistently sees a challenge of open a simple checking account. Some states are easier than others; however, the vast majority of accounts are opened by smaller state-chartered banks or credit unions. This leaves the industry shorthanded when it comes to not having access to traditional financing and banking tools that everyone else has access to outside of cannabis. This is where Valley National Bank steps in and assists cannabis companies struggling with basic financing and banking issues. Valley provides the help they need to operate efficiently throughout multiple states.
Outside of obtaining banking, it is equally challenging to obtain financing for a cannabis operator. Todd stresses that the industry is heavily reliant on equity investors. Non-bank lenders in the space offer high-interest loans, which helped fill a void left in the market. Todd said, “Fortunately, today there are banks like Valley and other financial institutions that are willing to lend to cannabis companies.”