Maine’s cannabis industry and the financial institutions that want to serve it got a double dose of bad news this week when political opponents scuttled two efforts to improve access to banking for marijuana-related businesses.

A prohibition on using federal funds to penalize financial institutions serving state-legal marijuana businesses did not make it into the compromise 2020 spending bill approved this week. The House included this banking protection in its June version, but it died in conference.

Even if it had passed, however, many banks and credit unions say they would need more protection than an appropriations rider, which requires annual renewals, before accepting cannabis accounts. That is why they supported the SAFE Banking Act, a permanent, standalone legislative fix.

But the Secure And Fair Enforcement (SAFE) Banking Act hit a wall this week, too, when Senate Banking Chairman Mike Crapo, R-Idaho, came out against it, ticking off a list of concerns that ranged from marijuana’s high potency to a lack of research on its health effects to money laundering.

“I remain firmly opposed to efforts to legalize marijuana on the federal level, and I am opposed to legalization in the state of Idaho,” Crapo said. “I also do not support the SAFE Banking Act that passed in the House of Representatives. Significant concerns remain.”

The two setbacks add to the problems facing a cannabis industry that is primed to expand but is struggling to overcome the lack of access to traditional banking services that other businesses take for granted. Under existing law, banks and credit unions fear they could lose their federal deposit insurance or being charged with money laundering for serving cannabis companies.


Such fears led one of the only two cannabis-friendly Maine credit unions to stop accepting new cannabis accounts last year. This has inflated the operating costs of Maine’s $47 million a year medical marijuana industry. The problem is expected to get worse when recreational sales begin next year.

Members of Maine’s federal delegation on Thursday urged Crapo to reconsider his position, noting the SAFE Banking Act had passed the House with bipartisan support in September by a 321-103 vote. Reps. Chellie Pingree, D-1st District, and Jared Golden, D-2nd District, both voted in favor of it.

“It is common sense that legal businesses should have access to financial services,” Pingree said. “Forcing the cannabis industry to operate with bags of cash is unsafe and unnecessary when banks and credit unions are eager to help these businesses.”

The SAFE Banking bill would “add so much to our state and national economy,” Pingree said.

A companion bill in the Senate has stalled in Crapo’s banking committee while he awaits feedback on his long list of concerns.

Sen. Susan Collins is not a co-sponsor, but does support the Senate version of the SAFE banking act.


“Senator Collins continues to support efforts to change federal banking laws so that financial institutions in Maine and other states that have legalized state-licensed cannabis businesses are not penalized for providing banking services to them,” Annie Clark, spokeswoman for Collins, said in an email. “It is dangerous in those states for those involved to be forced to have a cash-only business for paying their employees and bills because they can not use banks and credit unions.”

Maine Sen. Angus King is a co-sponsor of the Senate version.

“The ongoing uncertainty facing legal hemp and marijuana businesses is government at its worst. By slow-walking these needed changes and blocking legal businesses from accessing financial services, we’re threatening the livelihoods of hardworking Maine people who did everything right and played by the rules,” King said in a statement. “This is a serious and unneeded setback, but the fight is far from over. I will continue pushing for this bipartisan, common sense bill so legal Maine business owners can stop worrying about residual red tape and focus on serving their customers.”

Financial institutions in Maine also were dismayed by the failure to revise federal regulations.

“We are disappointed,” said Todd Mason, CEO and president of the Maine Credit Union League. “With the recreational marijuana industry launching here in Maine, we were hoping legislative safeguards would be in place to protect those financial institutions who are interested in serving these legal businesses.”

The association will work with the congressional delegation until legislation is adopted, which Mason hopes will be some time in 2020, but it looks like Maine’s adult-use cannabis market will be forced to launch without access to traditional banking.


“Until there are changes to the law on the federal level, many financial institutions will remain on the sidelines,” Mason said. “This poses a significant public safety risk given that cannabis businesses deal with large amounts of cash.”

Legalize Maine President Paul McCarrier, who helped lead the referendum drive that legalized adult-use cannabis in 2016, said a lack of cannabis banking options is one of the biggest challenges facing Maine’s medical and recreational industries, as well as all the ancillary businesses that work with them.

“They are just being stupid, there’s no other way to put it,” McCarrier said. “They have this industry that is notoriously non-compliant, and they want them to be, but they don’t give that industry the access they need to track their financial transactions and collect the taxes needed to regulate them. It’s dumb.”

As a result, cannabis businesses like the one he operates, 1 Mill in Belfast, are forced to deal only in cash, which can drive up the cost of doing business because of the time, labor and bookkeeping required to run a cash business. It also puts these businesses at risk of theft and robbery.

Without access to financing, a cannabis business owner must pay higher rates for private loans to raise capital for start up, expansion or emergencies, McCarrier said. Employees struggle to get a bank-issued car or house loan, even if they earn a good salary from a growing businesses, he said.

“We could be doing more, pumping more money back into the state,” he said. “But we’re handcuffed.”


There is no law explicitly prohibiting financial institutions from doing business with cannabis providers, but there is a catch: they are required to file reports on any “suspicious activity” exhibited by customers, which means banks and credit unions that take on cannabis-related customers must file a report on every financial move those businesses make in order to protect themselves.

Failure to follow those strict guidelines could implicate the bank in any customer activity deemed illegal by regulators or law enforcement. The SAFE Banking Act would have eliminated that extra regulatory burden and required regulators to treat the banking relationship with cannabis providers like any other.

For that reason, an estimated 29 out of 30 financial institutions in states with some form of legal cannabis have decided it’s not worth the trouble, according to Washington, D.C.-based nonprofit public policy group the Brookings Institution.

In Maine, only one financial institution – Portland-based cPort Credit Union – openly touts its willingness to work with cannabis companies, although there may be others that do so more discreetly. Bath-based Five County Credit Union used to market to cannabis businesses, but stopped taking on new customers from that industry in early 2018 after former U.S. Attorney General Jeff Sessions signaled his intention to reverse an Obama-era policy of ignoring the legal cannabis industry.


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