Fewer Banks Working With Marijuana Business Clients Amid Coronavirus, New Federal Report Shows

Fewer Banks Working With Marijuana Business Clients Amid Coronavirus, New Federal Report Shows

The number of financial institutions servicing the marijuana industry declined again over the last fiscal quarter, new federal data shows, though there seem to be multiple factors behind that trend. The Financial Crimes Enforcement Network (FinCEN) reported last week that 695 banks and credit unions were working with state-legal cannabis businesses as of the end of June. That’s down from 710 in the previous quarter, which itself represented a dip from prior numbers. A quick glance at the new government chart might make it seem that banks are significantly less willing to take on marijuana accounts of late. But it should be noted that FinCEN, which is part of the Treasury Department, stopped including hemp-only businesses in their quarterly reports since the crop was federally legalized under the 2018 Farm Bill—which accounts for at least part of the dip as compared to prior figures that counted hemp-focused accounts. Via FinCEN. So what’s behind the more recent downward trend that continues even past the hemp-related accounting switch? According to the agency, “the COVID-19 pandemic may be adding to this apparent decline” and some marijuana companies “have likely been closed during this time period, due to government imposed quarantine restrictions.” That said, most states allowed cannabis companies to continue to operate as essential services amid the coronavirus pandemic—and states like Illinois are seeing record sales in recent months. Another potential reason could be that banks have been understaffed, causing delays in filing required suspicious activity reports (SAR) for marijuana businesses. Via FinCEN.…

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Source : MJ moment
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