PNC Bank will close the bank accounts of the Marijuana Policy Project (MPP) on July 7, citing the risk of the bank faces from the hard-line U.S. Attorney General Jeff Sessions has adopted for enforcing federal drug laws as they apply to cannabis. The MPP, an advocacy group that lobbies for decriminalization of marijuana, opened the accounts in 1995.
Until now, U.S. banks have refused to open accounts for marijuana businesses involved only in growing and distributing marijuana. But when the Attorney General in May ordered federal prosecutors to seek maximum penalties for violations of federal law, PNC re-evaluated its decision to maintain accounts for marijuana-related groups that do not directly touch the plant.
MPP’s chief operating officer told The Washington Post that a PNC official told him in May of the July 7 closure, after an audit of the bank’s accounts “revealed that [MPP] received funding from marijuana businesses that handle the plant directly.” The bank said that it could not take the risk associated with the new push to enforce more strictly existing federal law. In essence, banks accepting deposits from marijuana-related businesses could be prosecuted for money laundering.
A handful of local and regional banks in states where marijuana is legal have offered banking services to marijuana business, but PNC, a $57 billion financial services giant, is unwilling to continue solely on the basis of the Obama-era Cole Memorandum that instructed federal agencies not to spend money enforcing federal law in states that have legalized medical or recreational marijuana.
Canada Ponders an Unusual Drug Problem: a Shortage of Marijuana
The biggest challenge for Justin Trudeau’s forthcoming legal recreational marijuana market is a shortage of pot, the finance minister of Canada’s most-populous province says.
Ontario’s Charles Sousa said a supply crunch was discussed during a meeting with provincial and federal counterparts this week. Canada is aiming to legalize recreational pot in the next 12 months, the first major economy to do so. One analyst said he’s concerned the government could use a supply shortage as an excuse to delay rolling out the program.
“Ultimately the biggest problem that appears after today’s discussion is one of supply,” Sousa said in an interview this week. Finance ministers were told demand is “quite high” for marijuana already in Canada, he said. “So we want to make certain that, when we do proceed, there is sufficient supply to accommodate the activity because what we’re trying to do is curb the illicit use and organized crime that now exists around it.”
Read more at Bloomberg.