Despite the Cole Memo issued by the federal government in 2014, banking remains a huge issue for marijuana businesses, including ancillary businesses that do not even handle the product.
A Business not being able to bank forces operations to be cash intensive and provides for community safety issues, a primary concern for the marijuana industry.
Forbes Magazine reports on Chase Bank continuing to fight support for regulation.
Chase closes a marijuana media account claiming ‘reputational risk.’
Chase bank has closed the account of a cannabis news website for….get ready…reputational risk.
The website doesn’t sell or touch cannabis at all. It merely discusses the health benefits of marijuana. It breaks no laws whatsoever.
It all began when Max Simon, an existing customer of Chase decided to open an account for his marijuana website Green Flower Media. It is a Los Angeles based business that writes about marijuana health issues. The state of California has legalized medical marijuana, so there is a great deal of interest in marijuana and its health benefits.
Chase did its due diligence and approved the account. It even processed some transactions. Then within a week, Simon received a notice that the account would be closed. Chase wrote to Mr. Simon saying in an email, “After further review with our credit department, we terminated this merchant due to reputational Risk (section 10.3 I) in the merchant agreement.The entire website is based on media regarding Cannabis (which is not supported by Chase).”
Simon escalated the issue to no avail. He could open an account at another bank, but since he was an existing customer of Chase, it was more convenient for him to do his banking with one entity.
A Chase spokesman said, “As a federally regulated institution, we don’t process payments for businesses participating in federally prohibited activities.” Even though Green Media doesn’t sell marijuana or handle it, the company does offer a Health Summit Bonus Package that gives customers discount codes for cannabis products. It’s very possible that this is what scared them away. The discounts though look to be for accessories and not dispensary coupons. Either way, Chase is taking an extremely conservative approach to cannabis businesses and it can afford to do so since the courts tend to side with the banks in these situations.
Recently, the courts sided with the Federal Reserve Bank of Kansas City when a cannabis credit union filed a lawsuit against it. Since marijuana remains to be federally illegal, banks have every right to just say no.
Source: Chase Closes A Marijuana Media Account – Forbes
Adilas420 continues to advocate for banking support and has a number of resources to help Cannabusiness owners seeking banking solutions. Please contact us for 30 minutes of free guidance and advice.
