In what is a big setback for Florida’s medical marijuana industry, the only bank in the state that accepted deposits from cannabusinesses announced it will no longer handle their money.
First Green Bank, a community bank that operates only in Florida, had allowed banking privileges for companies that operated cannabis businesses. But last week, it suddenly reversed course, shaking up an already fragile industry.
According to the Miami Herald:
Initially, the announcement — just a few months after the bank was the first in the state to handle medical marijuana clients — sent some clients looking for alternatives. But the bank has apparently found a new institution willing to take its place, and companies … said they’re confident that Florida’s 40,000 card-carrying medical marijuana patients won’t notice any hiccups.
“There will be no interruption or change in operations as far as patients and members are concerned,” Jake Bergmann, CEO of Surterra Holdings, a medicinal marijuana operator and a First Green client told the Herald.
Because the federal government considers cannabis an illegal substance without medicinal value, banks have been reluctant to get involved in the marijuana industry. Since banks are federally regulated, financial institutions have forced cannabis businesses to seek services elsewhere. The result is that nearly all marijuana enterprises — from farmers to retailers — operate in a cash-only system.
Because First Green Bank was a community bank that did not require federal approval, it had gladly handled the accounts for all but one of the seven licensed producers of cannabis in Florida.
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According to the Miami Herald, the bank may be acquired by a larger financial institution in the state. The transaction may have been muddied by the cannabis involvement.
“It’s an important initiative for us to act as a safe harbor for professionals in the cannabis industry,” First Green Bank said in a statement. “However, we have made the tough business decision to end our medical cannabis business practices and have an alternative solution for banking in place for our customers in the industry.”
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With First Green changing its policy, many cannabis companies will now be forced to transfer tens of millions of dollars somewhere else. Ben Pollara, executive director for Florida for Care, the organization that backed the campaign to legalize an expanded medicinal marijuana system in the state last year, told the Herald:
“Most of the public policy challenges with medical marijuana laws stem from the conflict between state and federal law, and here’s a glaring example of that. On the basis of how much money you’re talking about, you can’t be someone shuffling cash from bank to bank. Florida allows 25 stores (per license). … That’s a major deal if all the sudden overnight their bank goes ‘here’s your pile of cash, get out.’”