Will Banks work with the Cannabis Industry?
Marijuana is legal in 29 states plus Washington, D.C., but it is still illegal on the federal level. Entrepreneurs in the cannabis industry are unable to use banks because most financial institutions are regulated by the Federal Reserve.
Advocates for marijuana legalization had hoped that the federal law regarding cannabis would change soon, but Attorney General Jeff Sessions put an end to that after he rescinded Obama’s federal policy on states with legal cannabis earlier today.
However, a bank in Maryland may be changing the trend regarding banking and the cannabis industry. A community bank owned by a publicly traded company called Severn Bancorp in Annapolis has provided accounts for several customers in the cannabis industry, according to The Washington Post.
To avoid government attention, those with accounts do make sure to be in strict compliance with the state’s medical marijuana regulations. They are also not permitted to write or accept checks or apply for loans.
A credit union in Colorado also permits accounts for those in the cannabis industry. Safe Harbor Private Banking is providing bank accounts soley for cannabis businesses, and several other banks have made exceptions for regular customers.
Safe Harbor meticulously monitors their customer’s banking activity for illegitimate sales and transactions. The credit union has closed several accounts after suspecting that the customers were not abiding by regulations. Others have withdrawn their money rather than deal with the strict rules and fees. Customers pay high fees in exchange for having an account with the bank, $450 for every deposit of $100,000.
The House voted for an amendment that would block federal law enforcement from penalizing banks that opened accounts for cannabis businesses, but it was removed from the final legislation and Congress Republicans have since blocked any additional attempts at passing another amendment.