Currently, most cannabis-based businesses operating in the country are doing so on cash-based models as financial service options are lacking for many such endeavors. One credit union in Colorado wants to provide services to businesses in the hemp and cannabis industries, but it has run into obstacles to doing so.
According to reports, the Fourth Corner Credit Union cannot operate until it receives a master account. The organization’s application for that account was denied in July 2015, prompting the new credit union to file lawsuits naming the Federal Reserve Bank and the National Credit Union Administration. A statement issued by the Fourth Corner Credit Union said that the organization is seeking an impartial and fair hearing on the matter.
Marijuana-based business owners say that the cash-only environments they are forced to operate within hurt their options for seeking business loans and credit. They also report that the large amounts of cash circulating in the industry and communities creates an issue of safety for the businesses and the public.
The issue of financing cannabis-based endeavors is complex, though, because banks span various states and are governed in part by federal law. Because marijuana laws vary from state to state and from the federal to the state level, bank regulators are worried about the difficulty in matching laws correctly at the same time they want to serve communities in the most appropriate manner.
This case is a good example of how various laws can come in to play during business litigation. When filing a lawsuit or seeking an action from another person, business owners must understand how all laws come into play.
Source: Credit Union Times, “Pot Credit Union Sues NCUA,” Elizabeth Peace, Aug. 04, 2015