Deciding to Serve the Marijuana Industry



Analyzing Risk and Contradiction

In states where such operations have been legalized, businesses engaged in marijuana-related activities could prove profitable partnerships for credit unions. To mitigate the risks involved in such alliances, it is necessary to consider all the legal ramifications, both state and federal. A Senior Counsel weighs in on the uncertain issue.

Over 20 states have legalized the practice of selling and producing marijuana in some fashion, activities that remain illegal under federal law. Because of this inconsistency, financial institutions are left battling the question of whether or not to open accounts and serve companies engaged in marijuana-related businesses. Unfortunately, there is no clear answer to that question. So what can a credit union do if it is considering holding business accounts for members who grow or sell marijuana? Management and the board must take into account the credit union’s needs and have detailed knowledge of all the relevant factors, including the following:

• Statutes rarely occupy an area of law all by themselves. The credit union must understand and evaluate all supplemental materials on the issue in order to adequately determine its potential risks.
• Do the potential member’s financial needs, coupled with increased credit union fee income, coincide with the credit union’s current and projected economic situation?
• What should be included in developing new policies, procedures and account agreements for usinesses
engaged in the production or sale of marijuana in order to mitigate the regulatory and legal risks?

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