The collapse of Silicon Valley Bank (SVB) isn’t good news for anyone.
Bank collapses portend wider threats to the economy – the Great Depression is one such example – particularly when they derive from an eroding capital base resulting from the Federal Reserve raising interest rates to battle inflation.
It is estimated that more than 50% of venture-backed companies used Santa Clara, California-headquartered SVB as their depository and financing institution.
Wealth management, currency hedges, stock placements, you name it: SVB was the go-to financial institution for the tech industry.
So SVB’s collapse is a big hurt for the tech start-up industry, a classic bank run.
The federal government’s stepping in and covering all deposits – not just those up to the $250,000 guaranteed limit – should help.
So, what is the effect of SVB’s demise on the cannabis industry?
Green disaster avoided
For once, the marijuana
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