FLORIDA: A recent study commissioned by industry journal American Banker reveals that the nation’s four largest banks have opened accounts for pot shops and marijuana-related businesses. Conducted by MRB Monitor, a firm that helps financial institutions identify the risks associated with the marijuana industry, the study examined public records in the state of Massachusetts and found that 34 percent of businesses that filed to operate medical marijuana dispensaries in Massachusetts between June 2015 and September 2016 had one or more accounts at Bank of America, Citigroup, Wells Fargo, or JPMorgan Chase.
If a similar pattern of working with the marijuana industry takes hold in Washington D.C. and the U.S. states that have legalized marijuana, the prospect of financial services for cannabis outfits may not be as dire as it at first appears.
Bank of America seems to have been the most accommodating. Over half of the marijuana businesses included in the survey had accounts at the bank, though it previously told the Statesman Journal that, “As a federally regulated financial institution, we abide by federal law and do not bank marijuana-related businesses.”
Guidelines issued by federal authorities in 2014 appeared to have offered financial institutions a legal avenue to provide their services to marijuana-related businesses (MRBs). Back then, the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury Department, provided guidance it said was meant to enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.
Yet, under the Controlled Substances Act (CSA), it is illegal to manufacture, distribute, or dispense marijuana, and marijuana – like heroin, LSD and ecstasy – remains a Schedule 1 substance under the statute.
In December 2016, U.S. Senator Elizabeth Warren, D-Mass, a member of the Senate Banking Committee, along with nine other senators sent a letter to FinCEN requesting guidance on how banking services might be offered to ‘indirect businesses’ that provide services to the state-sanctioned marijuana industry.
Hopefully, after nomination season comes to a close, a response to that letter will be forthcoming; there’s a lot at stake. As ArcView Market Research wrote, “Cannabis is arguably the fastest growing industry in the world. Regulated marijuana sales in North America totaled $6.9 billion in 2016, a 30 percent increase from 2015. Sales are projected to increase to $21.6 billion by the year 2021 representing a 26 percent compound annual growth rate.”