The budding marijuana industry is coming up against some major challenges from the titans of Wall Street, with several major banks saying they will steer clear of providing services to medical cannabis firms.
New York’s financial elite did not cite any policy or moral objections to cannabis. Instead, they explained that the law remains too opaque for them to take the risk of servicing marijuana businesses.
New York has so far licensed five businesses to sell and dispense medical marijuana. Five of the financial industry’s biggest names told Politico New York the services they would refuse to offer included handling deposits. They would also refuse to allow bank issued debit cards to buy marijuana.
The banks included Wells Fargo, PNC Bank, JP Morgan Chase, Key Bank and TD Bank. “While the use of medical marijuana is legal under applicable state laws in some states, the manufacture, distribution, and use of marijuana is still illegal under federal law,” a spokesman for Wells Fargo said.
“As a federally regulated bank, we cannot do business in the marijuana industry because the use of marijuana is still a federal offense,” a spokeswoman for KeyBank told Politico New York. New York was the 23rd state to legalize medical marijuana back in September 2014 after the bill was passed by the state senate and assembly in June.
However, the marijuana business need to not be left out in the financial cold if the major Wall Street Banks refuse to play ball. Speaking to the New York Business Journal in August, Nicholas Vita, co-founder and CEO of Columbia Care, which is on the of the state’s license holders said his company had experience in other states of how to handle the business’s financial affairs.
“When we begin to build a business of our own in any market, we always go back to our counterparties and say this is how we do it,” said Vita.
While New York’s financial industry may be fearful of falling foul of the marijuana laws the political establishment in the state has been broadly supportive of the changes. New York Democratic Sen. Kirsten Gillibrand was the first senator to ever give a key-note speech to a cannabis industry conference in early September.
Gillibrand expressed her support for wide-reaching changes of the nation’s drug laws. “It’s time to update our outdated federal laws that prevent patients in need from receiving care, restrict research on medical marijuana and its potential to treat illnesses, and limit the responsible growth of the medical marijuana industry,” Gillibrand said in a statement.
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