While many North American financial institutions have made a big show of steering clear of the the booming cannabis industry due to image concerns, it turns out four of America’s largest banks have held accounts for marijuana businesses, in direct contrast to public protestations.
An analysis by RB Monitor, a Chicago-based firm that pinpoints the risks financial institutions might face working with the cannabis industry, found that 29 of 84 applicants for cannabis business licenses in Massachusetts had an account with one of the nation’s big four banks: Bank of America, Citigroup, JP Morgan or Wells Fargo. Seventeen of the 29 were with Bank of America.
Pot remains illegal under U.S. federal law, so many banks have shied away from holding accounts for cannabis businesses, even in states where recreational use is now legal. The study, conducted for the American Banker, also noted that 19 of the 29 accounts were in the names of individuals who were members of teams applying for cannabis business licenses but whose connections to the industry were not obvious. Other accounts, however, were clearly cannabis companies.
“The findings raise questions about the extent to which the big banks are screening customers to determine whether they are part of the cannabis industry,” according to the American Banker.
The trade publication noted that the Obama administration has not strictly enforced federal pot laws, which has eased the pressure on banks. But the incoming Trump administration’s pick for attorney general, Sen. Jeff Sessions, has voiced sharp criticism of legalization.
The findings also challenge the notion that cannabis businesses are more likely to get accounts at small institutions or credit unions, and points out some owners were able to open accounts at major banks simply because they knew a branch manager.