Bank loans

Legal pot growers still can’t get bank loans

COLUMBUS, Ohio (WCMH) — A study of legal marijuana growers shows banks are still hesitant to take their deposits or lend them money.

A team of researchers from Ohio State University and the University of California, Davis, looked at how banks and marijuana growers still don’t interact.

“It’s clear that we need policies that make cannabis banking and finance fairer,” said Keith Taylor of UC Davis and one of the study’s authors. “It is also clear that ‘Ma and Pa’ companies need to partner in formal organizations in order to achieve economies of scale and harness their political power to support the transition to legality.”

Marijuana is worth more than almonds and dairy combined with California’s economy, making it the most valuable crop. Foreigners who can get their operations financed compete with California producers who have lived there for generations, the study authors observed.

“Licensed cannabis companies must bank their money and take out loans to build their business, but many banks are concerned that by doing business with the cannabis industry they are flouting federal laws,” Taylor said, which is a cooperative of the University of California. Community development specialist in extension.

“Banks that don’t accept cannabis legal cash deposits and don’t provide loans aren’t monetizing their deposits. Marginalized cannabis communities lack capital.

Of the banks and credit unions contacted by the researchers, most were not knowingly involved in the cannabis industry. Bankers have said they are crippled by ambiguous federal guidelines that pose a real risk to cannabis financing, largely because banks are required to report suspicious transactions to the federal government, the researchers said in a press release.

Marijuana is listed as a schedule 1 drug under the Federal Controlled Substances Act. Even in states that have legalized the recreational and medical use of cannabis, it’s still a federal crime possess, buy or sell marijuana. California legalized recreational cannabis for adults in 2016, and the industry is supervised speak Cannabis Control Department.

Financial institutions could be considered actors in a criminal enterprise even when providing banking services to employees who work for licensed members of the cannabis industry, or they could lose big on loans if the cannabis-related assets guaranteeing one loan were seized by federal agents, the statement said.

The research is published online in the journal Agricultural Finance Review.