WESTBROOK, Maine (NEWS CENTER) — Banks and credit unions are keeping their distance from the marijuana industry because the federal government still considers marijuana illegal.
Legal marijuana businesses can’t accept credit cards, they can’t secure bank loans or get any other business services provided by financial institutions, making them cash-only operations. Bankers in Maine say it’s frustrating because they’re losing out on a big opportunity to profit as well.
When the legalization of marijuana ramps up in Maine, there will be farms growing it, trucks transporting it and retail shops selling it. A classic business operation that banks can’t touch.
“These are all natural places for us to work and we’re missing an opportunity,” said Chris Pinkham of the Maine Bankers Association.
Right now, there are only a couple of credit unions willing to work with the industry.
“From a federal government standpoint its still viewed as an illegal substance, so obviously financial institutions are hesitant to do that,” said John Murphy of the Maine Credit Union League.
Catherine Lewis has felt the frustration first hand at her cannabis business, now based in Winthrop.
“It was the bank policy to shut down all cannabis-related businesses and we were one of them," she said. "For two weeks we weren’t able to run payroll."
She eventually found help from one of those credit unions. The U.S. Treasury and Justice departments said they won’t go after institutions that keep a close eye on their clients and report suspected problems, but banking officials say there’s a lot more red tape than that.
“The vast majority have said it’s too complicated, it’s too risky, we're going to wait and see how the feds deal with this," Pinkham said.
Besides the frustration from both the banking and marijuana industries, cash-only operations present a big security risk. No one in either industry thinks businesses should keep large amounts of cash on hand or be transporting it.