The Canadian cannabis industry is being treated like its U.S. counterparts, according to CBC News.
While the SAFE Banking Act makes its way through the legislative process in the U.S., banks remain nervous about involving themselves in the industry.
Initially, this seemed like an American problem, but thanks to their U.S. connections, major Canadian banks are starting to close their doors to cannabis clients, leaving many of them scrambling in a cash-only dilemma.
Dispensary owners south of the border know all-to-well how the situation affects them, carrying massive amounts of cash that makes them prime targets for crime.
Yet despite Canada fully legalizing marijuana, U.S. laws continue to create roadblocks that unfairly affect Canadians.
Dispensaries Deemed “High Risk”
Thomas H. Clarke owns a small dispensary in his home province of Newfoundland and Labrador. Up until now, he had a business account with Royal Bank of Canada, which he obtained prior to becoming licensed. Clarke explained to the bank that his business is a “cannabis accessories wholesaler.”
But just recently, Clarke received a letter from RBC, stating that his account was being closed due the business being “high risk.”
Clarke approached the other five major banks, but was given the same response. None of them want to deal with the cannabis industry. He told the St. John’s Morning Show:
American Pressure Unwarranted
We can forgive big banks for wanting to preserve their images with large U.S. partners, but the fact that American institutions are putting direct pressure on our banks is an injustice.
The U.S. has no right to impose its laws on Canada – something it has been happy to do since legalization. If Canadian companies cannot dictate how American businesses conduct themselves, then it is only fair, from both a legal and moral standpoint, for U.S. organizations to mind their own business.
Credit Unions More Receptive
Given the circumstances, the best solution is to deal with institutions who have not allowed the U.S. to force its prohibitionist values into their operations. But even then, there is no guarantee.
Located in Labrador City, High North was lucky to secure an account with a credit union at the last moment:
“In Labrador West, it was down to the wire. The High North shop in Labrador City also struggled to get a bank on board, and only secured its account with the Newfoundland and Labrador Credit Union two hours before opening at 4:20 p.m. on legalization day.”
Trevor Tobin – who runs the dispensary with his mother, Brenda as a co-owner – shared a similar story about his dealings with major banks. Like Clarke, every large financial institution turned him down.
But now, even the credit union he signed on with is no longer accepting new cannabis clients.
WeedAdvisor’s Concern for Future Clients
As a Canada-based company with a global presence, WeedAdvisor wants to see its clients treated fairly and afforded the necessary tools to safely conduct business.
The way dispensaries are treated in the U.S. is unsurprising. However, the hypocritical and outdated U.S. federal laws should not have any effect on legitimate businesses in Canada.
Hopefully, future legislation like the SAFE Banking Act will at least reduce the impact of this convoluted legal situation and cause some major banks to revisit their policies.s