Jef Baker: MBank (OTC:MBNC)

He and his company are taking the road less traveled and even more so, the road not many have dared to even tiptoe down: Banking for the Cannabis Industry. Despite recent state policy reform on cannabis, federal law is still constraining the industry from moving forward. Everyone needs money to grow and without access to basic necessities like banking, the industry can only grow so much. But then, there are those brave businessmen like Jef Baker, CEO of MBank (OTC:MBNC), who are braving the terrain and standing their ground to offer creative banking services for the cannabis industry. Like many entrepreneurs of the space, he has fought and persevered to be here and he’s here to tell us that he’s not going anywhere but up.

What was the deciding factor for you to join this particular industry?

I get fulfillment out of being entrepreneurial. To me, being an entrepreneur means getting creative to solve problems. Our mission at MBank is to serve the underserved. We find where the problems exist and immediately get to work in addressing them. The cannabis industry is woefully underserved by the banking industry and we want to be a part of changing that.

What skills from your previous experiences helped you in what you are doing now?

Our bank went through a near death experience in the most recent economic cycle. This gave me the invaluable opportunity to learn how to fix problems, motivate our employees when failure seemed imminent, and then find creative solutions to thrive in a competitive environment. Fighting against all odds for survival gave me an appreciation and respect for those in the cannabis industry and what they have gone through. We also learned that creativity and innovation are at the heart of overcoming the odds. We believe our entrepreneurial spirit is part of what will bring banking to the cannabis industry.

Our bank went through a near death experience in the most recent economic cycle.

Tell me about the point in the time you realized the coming of the ‘green rush’?

Based in Oregon, this industry is growing up around us. Colorado was first to experience policy reform on cannabis, then Washington, and now Oregon. I believe in the projections that this industry will be the largest of any industry the U.S. has ever seen. In 2014, we received a message of non-objection from our regulators that allowed us to go tackle this issue and we knew the ‘green rush’ was upon us!

What are you doing to impact the industry?

We are publicly providing banking services to the cannabis industry at a time when few banks, if any, are willing to take this bold stance.

Describe your work ethic to me in one word.

Relentless.

What does a typical work day look like for you in your business?

We run a bank focused on making a difference. I spend my time managing typical bank activities, but always seek to focus on strategic initiatives related to the reason for our existence.

How do you find inspiration in this industry? What have you found that has inspired you?

I admire how hard this industry has worked against all odds. People that work so hard for what they believe and deserve, not only access to basic services, like banking, but also the respect and appreciation as any customer would.

Tell me about an esteemed achievement of yours.

Statistically, MBank had less than a 5% chance of survival according to our financial metrics 3-4 years ago. Not only have we overcome those odds, but I believe we have finished number one for Oregon-based banks in terms of Return on Assets (the ratio of income to our size). Along the way we received a “Most Creative Bank” award, recognizing the effort and innovation that helped us survive.

How would you advise someone who wants to join the industry?

As it relates to banking, we are heavily regulated. To develop a strong program in banking for the cannabis industry, much work will need to be done with regulators.

To develop a strong program in banking for the cannabis industry, much work will need to be done with regulators.

What’s your newest knowledge about the marijuana industry?

We are actively watching the governmental stance on lending. While we recognize it may take some time for sweeping changes in federal law, we are hopeful to see changes that start to allow banks to lend to the cannabis industry. In the meantime, we are working actively with private lenders that have the ability to lend and introducing them to potential borrowers in need of leverage.

If we are sitting across from each other a year from now, how will our conversation about the ‘green rush’ be going?

It is my hope that we are talking about the significant progress made by the industry and the broader acceptance by banks. If we play a small part in helping to solve this immense problem, we will feel a strong sense of pride that the risk to make a difference was worth it.