Banks in Uruguay Refuse to Serve Legal Cannabis Retailers

Banks in Uruguay Refuse to Serve Legal Cannabis Retailers

by Chris Moore
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NEWS
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Cannabis is 100% legal in Uruguay, but international banks still don't want to risk violating international financial laws by handling drug revenue.

Last month, Uruguay approved the legal, regulated sale of cannabis via 16 pharmacies throughout the country. Yet despite the full legality of these sales, banks are threatening to close these pharmacies' accounts if they continue to sell cannabis. An anonymous government official said that these banks are protecting themselves from the risk of violating international financial laws by handling drug revenue.

At least one pharmacy in Montevideo, the country's capitol, has decided not to sell legal marijuana after Santander bank warned them they would terminate their account if they chose to. Even Banco Republica, Uruguay's state-owned bank, has warned pharmacies that their accounts will be closed unless they stop selling pot.

Diego Olivera, secretary-general of Uruguay’s National Drugs Council, said that meetings will be held with the pharmacy owners in order to determine how many have been contacted by their banks.

“Without doubt, in these processes of changing paradigms, they run up against moments of difficulty,” Olivera said. “We are working on alternatives.”

Senator Jose Mujica, who was president of the country when cannabis was legalized in 2013, has threatened to “gridlock” the country's parliament if authorities are unable to find a solution to the banking problem. Pablo Duran, lawyer for some of the pharmacies in question, said that selling cannabis in these pharmacies is “an activity that is completely regulated, licit ... and controlled.”

Account closure threats from banks will sound familiar to canna-business owners in the United States where banks are federally prohibited from handling marijuana-related funds. The situation in Uruguay is even trickier, because businesses are required to pay their employees by direct deposit, making it impossible for them to operate without a bank.


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Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.


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