First Citizens Hemp Banking Director: Partnership Is at the Heart of Services
Ryan Palmquest, who has years of experience in commercial banking, sees a bright future for hemp and wants to help the industry expand. He spoke with Let’s Talk Hemp from his office in Phoenix.
How did your career lead you to hemp?
Our vice chairwoman, Hope Bryant, had the vision for hemp. The bank has been around for 125 years, with many long-standing clients in the agricultural space, some of whom wanted to try hemp after the 2018 Farm Bill passed. We are also known for our expertise with medical providers and saw hemp and CBD growing as a complement to health and wellness.
Hope came to me and said, “We have a compliance program in place to work with existing clients but need to think more strategically and invest in our hemp business. I believe in it.” Honestly, I didn’t know the difference between hemp and marijuana at the time. But I think she saw an entrepreneurial spirit in me. I’m a bit of a go-getter and I can manage the challenge that comes with a highly regulated industry. She knew I had the drive and ambition to put First Citizens at the forefront from a financial services perspective.
I learned hemp is a commodity that is versatile and can revolutionize sectors and industries. It’s also a space plagued by issues related to compliance. I’m a banker and evaluate risk for a living, but I also see that with challenge comes the opportunity to really make a difference. That is important to me. The culture at First Citizens is to take a long-term approach with a vision that the bank is going to be around for decades to come. Somebody has to set standards and policies that will allow that industry to flourish. A bank of First Citizens’ stature can bring stability to lending in this space.
We were able to stand up a compliance platform that has been called best in class by regulators. Clients, always our priority, drove the design. Once we set up the system to take care of our existing clients, the need and demand from others in hemp was clear. I love the opportunity to build from the ground up and bring legitimacy and stability to an industry that deserves to grow and be given a fair shake.
How do you think having access to banking can affect the hemp industry?
It’s everything. The free flow of capital is an enormous part of business in general. Hemp businesses need affordable, reasonably priced capital. In the past, they have not even had access to basic financial products and services and that has hampered their growth. They need merchant services like money transfers and credit card processing and stable bank accounts. Many have had accounts closed by unprepared banks that tried to make a quick profit on fees but did not properly set up compliance.
If you think about it, what a bank does is create a platform with various products and services that allow a business to receive and move money. Things as simple as a cash deposit are sometimes not even available to hemp businesses. The ability to provide the industry with the most basic services and products has really made a difference. The stability we offer is important too. First Citizens is in it for the long haul. We have the compliance all set and are committed. We took the time to set it up right. We provide access to scale and growth to help them achieve their goals. Clients are desperate.
What would you want people to understand when you say you are a banker?
I want them to see me as a partner. Someone who wants to come alongside and see both parties succeed. A bank doesn’t make money unless their clients are succeeding. It has to be a partnership.
It’s hard to explain compliance fees. People get annoyed when bank services have fees. I’ve got 10 people in the back office that make it possible for hemp accounts to do business and be compliant, including attorneys who talk about how to protect our hemp clients. We spend millions and millions to stay in compliance and offer these services. We have to charge a fee to cover the cost of essential services that make this all possible.
I want them to understand we are here to set up accounts and provide a full suite of financial services, including loans and treasury management services. It’s so important for entrepreneurs to understand that access to bank loans can help them keep control of their business. We are not VCs or private equity, which provide an essential role in financing early-stage companies. We are here to partner in the growth of your business. You keep ownership.
What sets us apart is that we treat our hemp clients in the same way we do all of our business clients, providing competitive pricing on an extensive array of financial services for businesses and their owners. We want our clients to succeed, and we work closely with them on solutions that support that vision. We are looking to partner. We need you to be successful and we don’t want to close loans. We do not want your farm or your equipment; we want you to succeed.
My clients are looking for stability in a very unstable industry and that causes a lot of challenges. First Citizen wants to step up and be a resource. We succeed when you succeed.
What are your goals for 2023?
My first, second and third goal is to make sure that First Citizens is in the hemp space to stay. I want to see the industry reach its potential. We believe in the versatility and sustainability of this crop. With our ability to innovate and build out the infrastructure, it’s going to be incredible what this country can do with this crop. I’m determined to maintain our first-place position as the bank for the industry and to keep our clients in business.
We are so excited about the future of hemp and so excited to serve as a financial partner in this industry. It’s not often that you have an industry that is new. The potential is incredible, and we want to be thought leaders and impact in a positive way. These are good businesses run by good people with incredible leadership and energy. How often do you get a chance to build something and make a difference every day?