In depth report from WSJ (Oct 2020)
Here’s the introduction..
Many financial institutions looking to offer banking services to the expanding number of legal cannabis growers and distributors in the U.S. are still limited by spotty regulations and expensive compliance efforts.
The disparities between federal and state laws governing the use of marijuana and hemp, and the differences across states, are inhibiting banks from stepping into what has become a lucrative and legal business in many areas. Regulators have issued scant guidance and some of the existing advisories are outdated or set few clear obligations for banks, such as information that a bank should ask for from potential clients, financial institutions say.
Some financial institutions have created their own internal guidelines—from database tracking of a plant’s life cycle to old-fashioned site visits—so that their risk profile remains low and they remain in compliance with the broad intent of the wide swath of state and federal laws.
“The reason that bankers are so reluctant to get into this industry is primarily the compliance; [there are] very intensive compliance requirements, more than any other industry,” said Mel Barnes, chief operations officer at Oklahoma State Bank. The Norman, Okla.-based community bank began providing services to legal medical marijuana businesses in January.