Whether they know it or not, America’s four largest banks have held accounts for marijuana businesses, in contrast to public pronouncements that they steer clear of the cannabis industry.
An analysis by RB Monitor, a Chicago-based firm that pinpoints the risks financial institutions might face working with the cannabis industry, found that 29 of 84 applicants for marijuana business licenses in Massachusetts had an account with one of the nation’s big four banks: Bank of America, Citigroup, JP Morgan or Wells Fargo.
Marijuana remains illegal under federal law, so many banks have shied away from holding accounts for cannabis businesses.
The study, conducted for the American Banker, also noted that 19 of the 29 accounts were in the names of individuals who were members of teams applying for marijuana business licenses but whose connections to the industry were not obvious. Other accounts, however, were clearly cannabis companies.
The study also found that 17 of the 29 cannabis-related businesses had accounts with Bank of America.
“The findings raise questions about the extent to which the big banks are screening customers to determine whether they are part of the cannabis industry,” according to the American Banker.
The trade publication noted that the Obama administration has not strictly enforced federal marijuana law, which has eased pressure on banks. But the incoming Trump administration’s pick for attorney general, Sen. Jeff Sessions, has voiced sharp criticism of cannabis and MJ legalization.
The findings also challenge the notion that marijuana businesses are more likely to get accounts at small institutions rather than large ones, according to the American Banker, which points out that some marijuana business owners have been able to open accounts at major banks simply because they know a branch manager.