MBank To Close All Marijuana Business Accounts
Anyone who has been involved in the marijuana industry knows that banking is extremely tough. For almost all marijuana businesses, having a bank account is not even an option. MBank has been trying very hard to become the ‘go to’ bank for marijuana businesses. A little while back MBank announced plans to expand into Colorado. After pressure from the feds, they decided to back off that expansion. Late last week, MBank announced that it would be closing all accounts for marijuana businesses, which is a huge blow to the industry. Per Marijuana Business Daily:
MBank, the small Oregon-based financial institution that has serviced the cannabis industry since last year, told Marijuana Business Daily that it will close all of its accounts with marijuana companies in the next two months.
Jef Baker, the CEO and president of MBank, said the cost and time spent on compliance is too much for the Gresham, Oregon-based community bank to handle. The company – which quickly became one of the largest banks serving the marijuana industry – has about 70 to 75 accounts with cannabis businesses, Baker said. Most of them are in Oregon, though a few are in Washington State.
“We just do not have the resources to manage the compliance necessary” to service the cannabis industry, he said. “This is not what we want to do, this is what we have to do. We got into this business to serve an underserved group and I wish we could still do that.”
The case of MBank highlights just how unworkable federal guidelines are when it comes to marijuana banking. For a long time the feds didn’t allow any type of marijuana banking. In recent years the feds have issued guidelines that were supposed to clear up some of the grey areas, but as the MBank situation illustrates, those guidelines just created more problems than they solved. We need true banking reform, otherwise the industry will never reach its full potential, and security and logistic concerns will remain.