It had to happen eventually and now it has. After years of being shunned by banks everywhere in the U.S. and operating on a cash-only basis, a few cannabis dispensaries will now be able to open actual bank accounts. That's thanks to a pilot program just announced by Credit Union 1, a credit union headquartered in Anchorage and serving all of Alaska. The financial institution says the move is not intended to indicate any political or moral position on marijuana use.
Cannabis is now legal for sale and use on either a medical or recreational basis in 33 states and the District of Columbia, as well as Canada and Uruguay. It's become a $55 billion industry in the U.S. alone. But most of that money is still changing hands in the form of cash, making things awkward and dangerous for countless dispensary owners and employees.
That's because the industry exists in a weird limbo--legal in most states but illegal under federal law. Practically speaking, the $55 billion industry would not exist if the feds were doing a lot to enforce that federal law, and indeed the Obama administration issued a memo saying it would not enforce in states where cannabis was legal. But banks, which are federally regulated, fear consequences if they serve the industry. Doubly so after the election of Donald Trump, who said he believed states should regulate marijuana as they see fit but then appointed Jeff Sessions, a fierce cannabis opponent, as attorney general. However Sessions recently resigned for unrelated reasons.
The legal status of weed in Alaska has a long and complex history--decriminalized (small amounts for personal use) in 1975, recriminalized in 1990, decriminalized again by the state's Court of Appeals in 2003, and then recriminalized by the legislature in 2006. Then in 2014, Alaskans voted in a ballot measure to make recreational use legal. That was the same year voters in Colorado and Washington passed similar measures.
It now appears that legal cannabis is here to stay in Alaska, or at least that's what Credit Union 1 seems to believe. And so it says it will serve the industry with its pilot program. The size and duration of the pilot have not been announced, and only a few cannabis companies will be able to participate at first. At least some of these have apparently already been selected.
But Credit Union 1 seems ready to make a longer and bigger commitment. After noting that its pilot program is not intended as a political or moral statement on cannabis use, the bank's announcement explains:
"When it comes to our members, we always seek to meet the financial needs of those we serve without judgment or prejudice--and as a state-chartered credit union that only serves Alaskans, we are in the best position to provide this service for MRBs [marijuana related businesses]."
The credit union went on to stress its long commitment to serving those with underserved banking needs, which certainly applies to companies in the cannabis industry. The Credit Union also says it will donate 1 percent of its MRB profits to its own special community fund where local nonprofit organizations can apply for help for needy individuals in Alaska.
Meantime, as you might expect, a large number of dispensaries are eager to do business with the credit union and finally have a non-cash way to do business. If the program expands beyond its initial pilot, it could be a very good thing for local dispensaries, for the credit union's bottom line, and for struggling people in Alaska who could use some financial help.