Another Bank Is Changing Course, Won’t Work With The Marijuana Industry
Federal guidelines on marijuana banking are far from clear, and create more questions than answers. That is proven by the fact that so few banks will work with marijuana businesses, even though it’s legal to do so now under strict scenarios. The guidelines are so strict and burdensome that even banks that are willing to work with marijuana businesses on principle still refuse to do so because it’s more effort and trouble than it’s worth. Yet another bank is ceasing operations for marijuana businesses. Per Marijuana Business Daily:
First Security Bank of Nevada, which began working with the nascent medical marijuana industry in the state last year, has decided to reverse course because of compliance issues, its chairman told Marijuana Business Daily Friday morning.
“The board has decided to (essentially) exit the marijuana industry,” said Jason Awad, the chairman of the board of First Security. “We have attempted, at a huge cost of time, to implement a robust compliance program… We found out that the compliance issue is so costly that it’s going to be prohibitive.”
The move comes at perhaps the worst possible time: Licensed cannabis dispensaries in Nevada are just now gearing up to open, possibly in the coming weeks. This development could delay many of these businesses and present new hurdles for the state’s emerging MMJ industry.
The stance that First Security Bank of Nevada has taken is a similar one that other banks who have worked with the industry for a time have taken. The federal guidelines for marijuana banking are simply unworkable. Are there scenarios where the guidelines allow for marijuana business banking? Sure. But are they realistic guidelines? I don’t think so, and for proof of that, I offer up every banking company that has pulled away from the industry citing the reason for a change in policy being that being in compliance is too expensive. It’s beyond time for true federal marijuana banking reform.