Bank of Springfield, the main financial institution that serves Illinois medical marijuana businesses, will stop working with the state’s MMJ industry, forcing local cannabis companies to deal in cash or find another alternative.
According to the Chicago Tribune, the bank informed its clients last month that their accounts will be closed May 21.
The move is directly related to Attorney General Jeff Sessions’ action earlier this year to rescind the Obama-era Cole Memo, which provided key protections to states’ legal medical marijuana markets.
Here’s what you need to know:
- If cannabis companies in the state can’t find another bank to work with, they’ll be forced to increase their expenditures to transport and secure large amounts of cash, not to mention the difficulties it will create in paying employees and other expenses.
- Illinois’ dispensaries totaled $8.5 million in MMJ sales in February, according to the state health department.
- The state has other financial institutions that deal with the cannabis industry, but the few that do are smaller than the Bank of Springfield.
- The bank began its review into working with cannabis businesses in mid-January, shortly after Sessions’ move to tear up the Cole Memo. Bank officials then issued a statement that said working with businesses that operate in a legal gray zone could jeopardize non-MMJ industry customers.
- The bank declined to tell the Tribune how many cannabis businesses it had as clients.