Oregon residents are sick and tired of waiting for banks to get with the times.
According to a new survey, an overwhelming majority of Oregonians want financial institutions to start working with the cannabis industry.
Banks and other financial institutions have historically refused to open accounts, issue credit or offer loans to cannabis businesses since it continues to be illegal federally. Transporting or transmitting funds known to have been derived from the distribution of cannabis could theoretically put financial institutions in hot water with the United States Treasury and Justice departments.
And unlike with, say, illegally foreclosing on homes or giving executives bonuses with taxpayer-supplied bailout money, many banks report working with the cannabis industry would somehow damage their reputations.
The survey found that 87 percent of people in Oregon would not have a negative view of their bank or credit union if it were to work with a cannabis-related business. In fact, 44 percent said that they would have a more positive perception of their financial institution if it did so, compared to only 12 percent that said they would view a bank negatively. Among respondents aged 35 years and younger, 88 percent said they held favorable views of the cannabis industry.
“Though the uncertainty of federal laws and regulations may still be valid reasons for financial institutions to delay providing financial services to marijuana businesses, this research indicates reputational concerns are largely unfounded,” reads the report.
Surveying Oregonians on the reasons that they were in favor of banks serving marijuana businesses, the report found that 82 percent think that it would prevent crime, while 78 percent believe that it makes good business sense and helps the local economy.
“There is evidence that banks and credit unions seeking to work with marijuana businesses will retail their current customers and members as a result of the decision, possibly even attracting new ones,” reads the report.
Without bank or credit union service, cannabis businesses are often forced to function as cash-only operations. This makes conducting basic services like direct deposit for employees and sending tax payments challenging. It also makes the companies targets for crime. Businesses operating as cash-only are also more difficult to audit and could adversely affect tax revenue for states.
Two years ago, the U.S. Department of Justice gave the green light for banks to work with legal cannabis businesses, though require them to report any suspicious activity to federal authorities. While it was a historic step as it gives legitimacy to legal businesses, many banks are still hesitant to do business until legislative changes are made. In July, Congress blocked an amendment to the appropriations bill aimed at protecting banks that service the legal cannabis industry.
Oregon was one of the first four states to legalize medical marijuana in 1998 and is one of eight states to have legalized recreational marijuana so far. It’s statewide marijuana tax revenue for 2016 has so far exceeded expectations.