Banks Bail Out in Florida
When Florida’s medical marijuana industry was first starting out a few years ago, business owners faced a dilemma: Where could they find a bank to take their millions?
For a marijuana distributor, opening a bank account isn’t as easy as it is for the rest of us. The federal government still considers cannabis an illegal substance without medicinal value, so most banks haven’t been willing to take their money — even though 29 states have legalized the drug for medical use, and some for recreational use. And these businesses would be handling too much cash to stash it under a mattress.
Then First Green Bank, a Central Florida community bank that operates only in this state and doesn’t require a federal charter, stepped in. By this summer, it was handling accounts for six of the state’s seven licensed producers of medical marijuana.
But now, in a move that underscores the volatility of the state’s nascent market, First Green has announced that it is closing the accounts of its cannabis clients and won’t be handling their money past early January.
Initially, the announcement — which comes just a few months after the bank celebrated being the first in the state to handle medical marijuana clients — sent some clients scrambling. But the bank has apparently found a new institution willing to take its place, and companies that spoke to the Miami Herald say they’re confident that Florida’s 40,000 card-carrying medical marijuana patients won’t notice any hiccups.
“There will be no interruption or change in operations as far as patients and members are concerned,” said Jake Bergmann, CEO of Surterra Holdings, a medicinal marijuana operator and a First Green client.
Bank executives declined an interview and would not explain why they’re canceling clients.
But the Miami Herald has learned that the decision is due to a looming acquisition by a larger financial institution concerned about assuming the risk that comes with handling medical marijuana money.