America's cannabis industry banking issues hit Illinois this week, and it's all thanks to Attorney General Jeff Sessions' anti-marijuana posturing.
Illinois' Bank of Springfield has informed all of its clients working in the state's medical marijuana pilot program that their accounts will be terminated on May 21st, the Chicago Tribune reports. After working amicably with the cannabis industry for the last two years, the bank's abrupt dismissal could force dispensaries and distributors to deal strictly in cash.
"This is the closest we've been to being without banks in Illinois in this industry… which isn't good," Ross Morreale, co-founder of Ataraxia, which owns a cultivation facility in southern Illinois and co-owns three dispensaries, told the Tribune. "It makes everything more difficult."
Since California first legalized cannabis for medicinal use in 1996, the world of legal weed has continually butted heads with financial institutions. Time and again, banks have refused to handle money even tangentially tied to marijuana sales, claiming that necessary federal insurance policies legally prohibit them from interacting with canna-businesses.
Just last week, those banking inconsistencies forced the closure of Alaska's Steep Hill Laboratory, a fully licensed legal weed testing lab, after officials at Wells Fargo threatened to pull the research facility's lease out from under its landlord. Even without a direct tie to Wells Fargo, the bank decided that financing a landlord with relations to the legal weed industry was flying too close to the sun.
But while Wells Fargo had threatened to pull Steep Hill's lease as late as last year, Bank of Springfield has been clear that their decision to cut all canna-business ties was a direct result of Attorney General Jeff Sessions' revocation of the Obama-era Cole Memo, which previously offered de facto protections for state-approved adult-use marijuana business from the feds.
Even though Bank of Springfield only interacts with purveyors of medical and not recreational marijuana, the Illinois bank was still inspired to cut all ties with the controversial plant due to Sessions' January announcement. And this is despite the medical marijuana industry being protected from the feds by the Rohrabacher-Blumenauer amendment, as well as Sessions recently stating that the Department of Justice will not be targeting cases involving minor cannabis crimes.
"The bank's stance is that protecting their customers is paramount," Bank of Springfield spokesman Andrew Mack told the Tribune. "The Bank of Springfield will not jeopardize any of their customers by working with businesses that operate in the legal gray zone."
Now, like the rest of America's cannabis industry operators unable to find a willing financial institution to house their cash, a significant number of Illinois' medical marijuana producers, distributors, and retailers will be forced to pay their bills, taxes, and employees in stacks of cash — all which could create an entirely new host of security and transparency issues.
Illinois medical cannabis companies currently relying on Bank of Springfield accounts still have over 40 days to find a new bank willing to accept their controversial cash, or to at least invest in a better safe.
"For the industry at large, it's a real kind of punch in the gut," Jeremy Unruh, director of public and regulatory policy for Illinois medical marijuana operator PharmaCann, told the Tribune. "If you're a dispensary, you need to pay for a wholesale product, and you don't have a bank. How do you do it? That transaction might have to be in cash."
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