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Pot businesses outgrowing piggy banks

A long line leads all the way to the roadway at Theory Wellness in Great Barrington, Mass., one of the Berkshires’ recreational marijuana retailers, on April 19. Ben Garver/The Berkshire Eagle via AP/The Berkshire Eagle via AP

Marijuana is off and running as a growing, legitimate business in this and other states, but when it comes to financial services it remains in the shadows, in the netherworld of the not-quite-legal.

Business loans for marijuana shops are virtually nonexistent, and that makes the social equity part of this state’s commitment to would-be applicants more promise than reality. The handful of financial institutions that do handle cash from marijuana businesses do so at a premium. And even employees of cannabis-related businesses are having trouble just finding a place to deposit their paychecks.

The reason: Most banks don’t want to work with the marijuana sector because it is still classified as a controlled substance under the federal law. While there is no looming crackdown, banks rightfully fear possible fines or federal prosecutions. It’s a problem that can’t be solved locally; a solution must come from Washington, where it seems there might finally be bipartisan agreement when it comes to banking services.

The SAFE (Secure and Fair Enforcement) Banking Act would protect banks from prosecution for offering their services to cannabis-related businesses that are operating legally within state law. That means services from national banks, including credit cards, would become available to what is now a largely cash-dependent business in the 33 states where some form of marijuana is sold legally.


Cannabis Control Commission chairman Steve Hoffman, in a recent meeting with the Globe editorial board, said that five banks or credit unions currently have agreed to provide some banking services to marijuana businesses. That itself represents progress.

But as Globe reporter Dan Adams found out, that basic level of service often comes at a substantial price. GFA Federal Credit Union, for example, charges recreational cannabis businesses $5,500 a month in fees for a checking account, citing both the hassles of dealing with large amounts of cash and the costs of federal paperwork.


Of course, no local bank currently offers loans to cannabis-related businesses. That has left the door open for major national marijuana corporations to get a huge foothold in Massachusetts, offering loans at nearly usurious rates to those who don’t have working capital. That in turn makes local “ownership” difficult to define and hard to enforce.

One other aspect Adams’s reporting pointed to: Imagine trying to get a home mortgage when the bank finds out your paycheck comes from an outfit that sells weed.

Depending on an answer from Washington would not usually fill us with optimism for a timely solution. But as more states legalize recreational marijuana, the congressional contingent in favor of reform has grown.

The House version of the SAFE Banking Act now has 160 cosponsors, including at least 12 Republicans, and not insignificantly the backing of US Representative Jim McGovern of Massachusetts, chair of the Rules Committee. Last month, the House Financial Services Committee voted 45 to 15 in favor of advancing the bill for a vote, after amending it to include insurance companies as well as banks and to require the federal government to study diversity and inclusion in the cannabis industry. A similar bill, including those amendments, was later filed in the Senate, with 20 cosponsors, four of them Republicans.

All of that bodes well for action this year. And the support of Treasury Secretary Steven Mnuchin can’t hurt either.


There is no downside to a bill that would bring safety, security, and financial support to legal marijuana businesses. Congress, which could use a bipartisan win, can have one with the SAFE Banking Act.