In January of 2014, legislation allowing for the use of marijuana to treat certain health conditions took effect in Illinois. As of last Wednesday, the state government has been unable to find a bank to handle the state’s tax and fee collections from the medical marijuana industry.
We have already noted the difficulties that industry players have finding banks willing to take their money. Big banks and credit card companies have stymied cannabis-related business because marijuana sales remain in violation of federal law and they do not want to take the chance. Some smaller banks have tried to serve marijuana businesses, but they have run up against high reporting requirements and regulatory expenses.
The state of Illinois adds to the difficulties because the law that permits the use of medical marijuana expires at the end of 2017 and dispensaries will only be able to begin selling marijuana later this year. Given all the hoops that banks large or small will have to jump through to handle the industry’s cash, revving up a program that meets all the state’s requirements may not make sense for just two years of operation.
Low patient numbers make the state’s problem worse. Only about 2,500 patients have been approved by the state as eligible to receive marijuana from licensed dispensaries. The state recently recommended adding 11 conditions and diseases to the list of 37 the state had already approved for cannabis treatments.
The state legislature has also passed a bill to extend the program for four additional years, but the governor has not signed it, nor has he indicated whether he plans to do so.