Ally Marotti of the Tribune reports:
The main bank serving Illinois medical marijuana companies is pulling out of the industry, leaving operators with few options other than dealing in cash.
Bank of Springfield sent a letter to its cannabis clients late last month informing them that their accounts will be closed May 21. The decision is tied to the reversal of an Obama-era policy that discouraged prosecution of those operating under state marijuana laws.
The move is a setback for the industry, which remains a pilot program more than two years after medical cannabis became legal in Illinois. Strict regulations and other obstacles have added challenges to running cannabis companies and kept patient numbers too low for some operators to recoup their investments.
Taking away the bank accounts medical marijuana companies use to pay their employees, vendors and the government is another hurdle. It also eliminates some of the legitimacy and traceability of transactions that banking added to the industry, which had $8.5 million in retail sales statewide in February, according to the Illinois Department of Public Health.
(click here to continue reading Main bank for Illinois’ medical marijuana industry is pulling out, leaving some operators to deal in cash – Chicago Tribune.)
Yet another reason to vote against Governor Bruce Rauner, as if we needed any more. His willful antagonism towards medical cannabis is undermining its growth. Illinois certainly could do better.
Republicans, Democrats, Independents, etc. all agree that money is good for the Illinois budget, why not follow the model of Colorado, Washington, Oregon, California, Alaska, and others?
From an article earlier this year, also by Ally Marotti:
As the legal marijuana industry navigates uncertainty on the federal level, state attorneys general are asking Congress to pass a law allowing banks to work with cannabis companies.
Along with Illinois, 28 other states, Washington, D.C., and several U.S. territories have legalized medicinal cannabis, and eight states and the District of Columbia allow recreational use. But in the eyes of federal law, weed is still illegal, and the cash earned selling it is drug money.
Without banks, though, operations and growth could be hindered.
The federal government has issued guidance for how banks can work with cannabis companies, but without a law, banks hesitate to enter the growing industry. Illinois Attorney General Lisa Madigan and 18 other attorneys general — from 16 states, the District of Columbia and Guam — signed a letter this week saying they want that to change. Madigan was not available Wednesday for further comment.
Passing a law “would bring billions of dollars into the banking sector, and give law enforcement the ability to monitor these transactions,” according to the letter. “Moreover, compliance with tax requirements would be simpler and easier to enforce with a better-defined tracking of funds. This would, in turn, result in higher tax revenue.”
Banks that work with the cannabis industry can take further guidance from the Treasury Department’s Financial Crimes Enforcement Network. But, again, that’s just guidance.
“That’s not enough for the national and international banks,” said Cresco’s Bachtell, who has a background in mortgage banking. “They’re not comfortable with guidance; they want real regulation.”
The letter from the state attorneys general asks Congress for legislation to provide a “safe harbor” for financial institutions that work with cannabis companies in states where the drug is legal in some capacity. It points to a bill introduced in the Senate in May that would do just that.
More banks would likely expand operations into the marijuana industry if such a law were instituted, though it might take time for financial institutions to become comfortable with it, said John Hudak, a senior fellow at the Washington, D.C.-based Brookings Institution.
(click here to continue reading U.S. law sought to allow banking for legal pot – Near West.)