Banking has always been a titanic struggle for the cannabis industry. Since it’s still illegal federally, few, if any, U.S. banks have been willing to serve state-legal cannabis businesses out of fear of federal clap-back. In fact, as of February 2018, less than four percent (400 out of 11,000) U.S. banks and credit unions were willing to take the risk according to the Financial Crimes Enforcement Network’s latest Marijuana Banking Update.
Now, we can add one more bank to that list, the Gardner Federal Credit Union (GFA) in Massachusetts.
The state-chartered bank with around $500 million in assets has agreed to start accepting marijuana clients in Massachusetts starting on Oct. 1. They will offer basic services to marijuana clients including cash management, checking accounts, payroll, wire transfers, and bill payments, according to The Boston Globe. And GFA will work closely with Safe Harbor Services, a wholly-owned affiliate of Partner Colorado Credit Union, the leader in cannabis banking, to get its new services off the ground and running.
“We’re looking at a cannabis business as a legitimate business that wants to be recognized as such and that, without banking services, presents a tremendous public safety issue in our communities,” Tina Sbrega, the CEO of GFA, told the Globe. She continued saying, “Otherwise, you’re talking millions and millions of dollars of cash on the street.”
GFA’s decision to work with cannabis businesses helps to solve a few substantial issues for the Massachusetts legal marijuana industry, including some major concerns from regulators who were worried about dispensaries becoming targets of cash thefts.
Cannabis Control Commission Chairman Steven J. Hoffman told the Boston Business Journal, that GFA’s decision “will make for a more stable, adult-use industry with increased public safety for everyone in the commonwealth.” He went on to explain, “After working for many months to make sure banks and credit unions understood our security regulations, including the mandatory seed-to-sale tracking protocols, we are delighted that this group has taken the lead on providing banking services in our state.”
So far, Massachusetts has provisionally approved 30 marijuana businesses with plans to issue a license or two by the end of September. This indicates that recreational cannabis could open up a lucrative line of work for GFA considering the fact that Century Bank, who works solely with medical marijuana businesses in Massachusetts, charges $5,000 a month solely for checking services.
There’s no doubt that all eyes will be on GFA beginning October 1, 2018.