Attendees chat at the GAC’s first-ever informational marijuana business banking meeting for CU leaders.WASHINGTON – At previous Governmental Affairs Conferences, banking legal marijuana businesses was still too taboo of a topic for credit unions to discuss in a formal meeting.
But this year, something changed. On Sunday night, representatives from about 40 credit unions considering entering the marijuana banking space gathered at the Grand Hyatt to discuss the future of partnering with legal pot businesses. And despite recent threats from the Trump administration to crack down on recreational marijuana providers, attendees indicated that future is looking bright.
Former NCUA Board Chairman and current Bacino & Associates Partner Geoff Bacino organized the reception, which featured a short presentation by Partner Colorado Credit Union President/CEO Sundie Seefried. Seefried, whose Arcada, Colo., credit union has been serving marijuana businesses for two years, shared four reasons why she got into it. First, it helped take billions of dollars in cash off the streets in Colorado, improving community safety; second, it lined up with Partner Colorado’s mission to serve underserved markets; third, it was a strategic move that allowed the credit union to stay relevant; and fourth, it made a major impact on the institution’s bottom line.
“We see $2.4 million per calendar day in money that we’re processing and keeping off the streets,” Seefried said.
Noah Marine, legislative director for Rep. Ed Perlmutter (D- Colo.), also spoke, noting financial institutions face an uphill battle in seeing legislation enacted that would provide security and clarity in their marijuana business banking activities. He said new legislation would be introduced next month as a follow-up to the Marijuana Businesses Access to Banking Act, which Perlmutter sponsored in 2015.
“There’s an inherent conflict between federal and state laws,” Marine said. “We think legislation is the best way to solve that.”
NASCUS General Counsel Brian Knight also shared his thoughts with attendees from a state regulator’s perspective, noting that in states where marijuana is legal, financial institution regulators are caught in a grey area and more clarification is needed.
Anyone who is working in or has money invested in the marijuana industry faces continuing legal uncertainty. While 28 states have legalized the drug for medical use (eight of those have approved it for recreational use), it remains federally illegal. On Friday, White House Press Secretary Sean Spicer hinted at a federal crackdown in states where recreational pot use is legal, stating, “I do believe you will see greater enforcement of it.”
But that isn’t causing credit unions in the space to back down. In a follow-up interview, Seefried said while the comments made people nervous, she doesn’t believe it’s the direction the Trump administration will go. Kim Oliver, who heads up the marijuana banking program at Partner Colorado, is also not that concerned about a crackdown, but added it’s “always in the back of our minds.” She said if recreational dispensaries were in fact forced to close, they’d likely turn into medical shops.
Why the sudden interest among credit unions in marijuana business banking? Seefried said it’s because more states legalized recreational marijuana in the November election, plus credit union leaders are beginning to understand the tax benefits. It’s also a way for credit unions to gain a new specialty, Oliver added – if and when marijuana becomes federally legal and the big banks swoop in to serve businesses in the industry, they may find their potential customers already have solid relationships with credit unions.
“Credit unions have always been behind the scenes, and this is a way to find a niche, stand out above the banks and do something good for the people,” Oliver said.
And while most talk among credit union professionals is focused on the business side of marijuana business banking, Seefried and Oliver even touched on the benefits of marijuana itself. Seefried noted one dispensary Partner Colorado works with serves mainly baby boomers, who enjoy cannabis balm for aches and pains and edibles for a good night’s sleep, and Oliver shared that medical marijuana helped one family member get off opioids.
“We need to get rid of the stigma,” Oliver said. “And how do we do that? We educate.”
Partner Colorado’s efforts to raise awareness about the blossoming marijuana industry will continue tomorrow, when representatives from nine credit unions including Seefried’s cooperative will “hike the Hill” to educate members of Congress about their work as well as ask for additional security, protection and legislative guidance.
