With all of the banking problems the cannabis industry has faced due to the Schedule 1 status of marijuana, Florida medical marijuana seemingly avoided the conversation since they had the First Green Bank. However, Florida may now be more a part of the marijuana banking discussion than any state since the First Green Bank will not be accepting deposits and closing the accounts of dispensaries after the first of the year.
Apparently a larger bank is interested in buying the First Green Bank but feels that the marijuana banking business is too risky. The First Green Bank, that conveniently has been taking care of 85% of Florida’s marijuana producers’ banking needs, wants the buyout to happen and is facilitating the larger institution’s desires to make the acquisition happen.
Bank executives declined an interview and would not explain why they’re canceling clients. But the Miami Herald has learned that the decision is because of a looming acquisition by a larger financial institution concerned about assuming the risk that comes with handling medical marijuana money.
“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.”
Though most banks won’t touch the business, roughly 400 institutions across the country take on marijuana clients under guidelines established by the U.S. Department of Treasury’s Financial Crimes Enforcement Network. And like any business, marijuana companies rely on financial institutions to protect their money and facilitate transactions.
In Florida, where only 13 companies are licensed to grow marijuana — and only seven can sell it — the importance of having a financial partner becomes even more pronounced given the amount of money each company is working with. With First Green backing away, some companies will be transferring tens of millions of dollars.
After one year of servicing the banking needs of medical marijuana treatment centers in Florida, the closing of accounts creates a real problem. Ultimately, instead of helping dispensaries with their banking problems for just one year, the closure of accounts now may be a bigger headache than if the bank had never offered services in the first place.
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