The First Green Bank Fails Florida Marijuana Dispensaries
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With all the banking issues the cannabis industry has faced due to the Schedule 1 status of cannabis, Florida medical cannabis seemingly avoided the discussion since they had the First Green Bank. However, Florida might now be more a part of the cannabis banking conversation than any state given that the First Green Bank will not be accepting deposits and closing the accounts of dispensaries after the very first of the year.
Obviously a larger bank has an interest in purchasing the First Green Bank but feels that the cannabis banking service is too risky. The First Green Bank, that conveniently has been looking after 85% of Florida’s marijuana producers’ banking needs, desires the buyout to happen and is helping with the bigger institution’s desires to make the acquisition happen.
Bank executives decreased an interview and would not discuss why they’re canceling customers. But the Miami Herald has actually learned that the decision is since of a looming acquisition by a larger banks concerned about presuming the risk that comes with managing medical cannabis money.
“It’s an essential initiative for us to act as a safe harbor for specialists in the marijuana market,” First Green Bank stated in a statement. “However, we have actually made the hard company decision to end our medical cannabis business practices and have an alternative option for banking in location for our clients in the industry.”
Though the majority of banks won’t touch business, roughly 400 institutions across the nation handle cannabis customers under guidelines developed by the U.S. Department of Treasury’s Financial Crimes Enforcement Network. And like any business, marijuana companies count on financial institutions to secure their cash and help with transactions.
In Florida, where only 13 companies are certified to grow cannabis– and only seven can sell it– the importance of having a monetary partner ends up being even more pronounced offered the amount of cash each business is dealing with. With First Green backing away, some business will be moving tens of millions of dollars.
After one year of servicing the banking requirements of medical cannabis treatment centers in Florida, the closing of accounts creates a genuine problem. Eventually, instead of assisting dispensaries with their banking problems for just one year, the closure of accounts now might be a bigger headache than if the bank had never used services in the first place.
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