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U.S. Banks’ Marijuana Problem

U.S. Banks’ Marijuana Problem
PHOTO Andrew Magill

Economics

U.S. Banks’ Marijuana Problem

A Bank of America manager was fired and a Florida politician’s account was closed over links to cannabis.

In two separate incidents that together are an escalation of U.S. banks’ offensive against the marijuana industry, a Washington state bank manager was fired and a Florida politician’s account was closed.

Neither bank account is alleged to have been used to run a marijuana business. In both instances, the financial institutions merely deemed activity marijuana related.

Tracy Camp, a bank manager in Vancouver, Washington, was fired by Bank of America after her husband, who owns a legal cannabis cultivation company, deposited money in the couple’s joint account, according to The Columbian.

And in Florida, Wells Fargo closed the campaign account of Nikki Fried, a candidate for state agriculture commissioner, after she accepted contributions from medical-marijuana industry lobbyists, Forbes reported.

Cannabis and the banking industry have long had a relationship that at best is either contentious or nonexistent.

Marijuana dispensaries and cultivation operations have long struggled to find financial institutions willing to do business with them. The result has been an ongoing public-safety and accounting nightmare, with businesses forced to pay state and federal taxes and handle payroll all in cash. Efforts to solve this ongoing problem have been blocked in Congress.

Despite big banks’ recent involvement laundering money for drug cartelscommitting massive fraud and rigging the mortgage market to redistribute wealth back to them, these banks have so far largely insisted to follow federal law to the letter and refused, wholesale, to do any businesses with the marijuana industry.

Just north of 400 U.S. financial institutions serve marijuana businesses, according to American Banker, fewer than four percent of America’s roughly 11,000 banks.

But neither Tracy Camp nor Nikki Fried is in the marijuana industry. At best, they could be described as marijuana-adjacent — in the same way, a defense attorney who takes marijuana clients or an electrician who works on cultivation warehouses could be so classified.

Closing accounts like these is an entirely new thing — and one that could cast a lasting chilling effect that has the potential to reduce the cannabis industry’s political power at a pivotal moment.

Major political candidates from both parties regularly accept donations from figures and businesses in the marijuana industry.

Cannabis growers and sellers, as well as industry consultants and attorneys, have donated to state and federal elected officials — some of whom have openly courted donations from cannabis.

Until now, none are known to have been punished by their banking institution as a result. It’s too early to determine what the long-term impacts of this development will be, but it’s fair to assume some politicians will think twice before accepting a contribution from a marijuana-industry player.

In turn, a dearth of campaign cash could deaden the cannabis industry’s political power, at a time when a record number of Americans say they want marijuana legalized, and more and more states are poised to consider marijuana legalization.

In Camp’s case, her husband owns a construction firm as well as a marijuana cultivation company called Sunshine Farms. The couple share a bank account to pay for household expenses as well as expenses related to rental properties they jointly own. According to Camp, her husband deposited money into their joint account that she then withdrew and deposited into her own account — and that was close enough to money laundering for Bank of America to fire her, after 17 years in the banking industry.

In Florida, Fried had her campaign account closed after the bank inquired whether some contributions she’d received had come from marijuana-industry consultants — not marijuana growers themselves, but consultants.

When she confirmed that she had, Wells Fargo informed her on Aug. 3 that her account would be closed — an “arbitrary, unprecedented action against the fundamental rights to speech of a candidate for public office,” she said in a news release.

Other marijuana advocacy groups like the Marijuana Policy Project have had their bank accounts closed as well. It’s a trend, and it’s a troubling one. It is difficult, but not impossible, to conduct business without a bank account. But not everyone is comfortable dealing all in cash — and entities like political campaigns simply cannot truck entirely in cash without drawing attention from elections watchdogs.

TELL US, have you experienced a problem when it comes to cannabis and banking?

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