In the United States we’re pretty clear on why banks won’t engage with businesses in the cannabis industry – they want protection from the federal government before they work with anyone dealing in federally illegal substances (even if it is legal on a state level). However, that is really the only roadblock standing in the way and many banks and credit unions have said they would love to provide services to the growing industry should the laws change to offer them protection from prosecution for money laundering or anything of the sort.
However, in our northern neighbor Canada, marijuana is expected to be legalized nationally by April of 2017 – yet two of the country’s major banks have already made it clear that they do not intend to work with any businesses they deem as being marijuana-related. Scotiabank has already started sending out notices to a few companies – including Hemp Country (which only sells marijuana paraphernalia like bongs and pipes, no actual cannabis) and a company who is applying for a license to grow medical marijuana (who chose to remain anonymous).
“It’s kind of insulting really, especially when legalization is right on the horizon,” he says (Nathan MacLellen, owner of Hemp Country).
“Nothing in the store that we sell is illegal. Every single variety store sells pipes and bongs nowadays, so why are they singling us out all of a sudden?”
Along with Scotiabank, the Royal Bank of Canada also intends to close accounts with any businesses that are deemed marijuana related. Both have said that this is not necessarily a permanent stance, but for the time being they do not intend to work with a higher risk new industry.
“We confirm that as part of our normal business practices, the bank periodically reviews the client relationships we have against several factors used to balance the benefits and risks associated with providing them with banking services,” spokesman AJ Goodman said in an email.
Considering the entire country is going to have laws allowing legal access to marijuana – from the looks of it by early next year – it doesn’t make much sense that these banks (and some credit unions) are choosing to reject accounts related to the cannabis industry. After all, the industry is quite large here in the U.S. already – and with their entire country working to end prohibition there will be many customers in need of funding for an industry that has already proven it is profitable. Luckily there are still other options available – but for long-time customers of these banks hoping to enter the industry, they will need to find a new place to store their funds.