The nation’s largest banks aren’t willing to work with cannabis businesses because the risks of working with a product that’s federally prohibited outweigh any benefits, executives with the financial institutions told Bloomberg.
Citigroup, JPMorgan Chase, KeyCorp and Wells Fargo all said they won’t consider working with marijuana companies because it’s still federally illegal despite the nascent industry’s growing stream of revenue.
The Financial Crime Enforcement Network (Fincen) recognizes the dangers faced by business owners and managers who lug around thousands of dollars in cash, and it is reminding banks in closed meetings that it provided instruction last year on how to work with cannabis companies operating legally under state law, Bloomberg said, citing a person familiar with the talks.
That’s had little effect on banks’ decisions on whether to do business with cannabis companies, though. KeyCorp chief executive Beth Mooney called the industry “restrictive or prohibitive” while John Stumpf, the CEO of Wells Fargo, told Bloomberg that marijuana is “out of my sights right now.”
Some smaller banks are opening their doors to the cannabis business, but they have faced numerous challenges. MBank, a small community financial institution in Oregon, last month said it was closing all of its cannabis business accounts because it spent too many resources on compliance.