BayCoast Bank, based out of Swansea, has confirmed to the Business Journal that it is in the process of taking on four or five medical marijuana facilities, and would be willing to service those institutions if they move into the recreational market as well. The $1.6 billion mutual bank has branches in Massachusetts and Rhode Island.
Nicole Almeida, chief marketing officer for BayCoast, said the bank decided in July to accept deposits from “medical facilities that are in the recreational or adult use space,” after talking to dispensaries for months to better understand the business. “We’re not at this time working with anyone that is strictly adult use,” Almeida said.
Almeida declined to disclose which marijuana businesses the bank is working with, but said that it includes a newly developed, licensed establishment as well as medical marijuana businesses that are currently operating.
The 450-person bank has dedicated three employees to the marijuana industry for now through a newly created division in the bank, and would hire more as additional clients come on board. Almeida said the bank ultimately decided to enter the field because it felt there was an unmet need.
“There’s a safety issue for the community at large and the owner of the businesses with cash on the street,” Almeida said. “We’re doing this because it’s the right thing to do.”
Separately, both New England Treatment Access in Northampton and Cultivate in Leicester have confirmed that they are working with a bank on the retail side of their business. Salem’s Alternative Therapies Group, set to open this Saturday, also confirmed that it has a bank for its new recreational marijuana business. All three dispensaries declined to specify which financial institution they were working with.
Though banking remains an issue for the industry at large, the developments have soothed concerns that marijuana shops would be selling recreational marijuana without being able to deposit that money in a financial institution.
“I’ve been operating in this space for better part of 10 years and there’s always been where there’s a will, there’s a way,” said Kevin Fisher, a founder of New England Treatment Access. “I’ve never gone unbanked. For compliance (and for a) trackable, auditable business, you need clear financials and you need to be banked. That’s the business side. And the public safety side, keeping large quantities of cash around is something we try to avoid.”
Up until now, the only financial institution that had confirmed it’s working in the recreational side of the marijuana industry was GFA Federal Credit Union in Gardner. Because of restrictions around credit union fields of membership, the institution was limited to working with businesses in Worcester County and three dozen towns in Middlesex County. GFA also serves clients in the medical marijuana field.
Century Bank has been the only local bank that says it serves clients in the medical marijuana business.
Fisher said that NETA had established a relationship with a financial institution ahead of its first recreational marijuana sale on Nov. 20. Ultimately, NETA began conversations with one financial institution to prepare to accept deposits ahead of July 1. Fisher said NETA signed a non-disclosure agreement with the organization, and declined to specify if it was a credit union or a bank.
The dispensary is still using Century Bank for its medical marijuana business.
The state’s other recreational marijuana shops have also been able to secure a banking relationship, but are tight-lipped with details. “We absolutely have a bank,” said Edwards of ATG in Salem, but declined to provide further details.
Cultivate also declined to comment about its banking relationships.
Despite the new options for the market, banking remains a problem for the industry at large. Cannabis Control Commissioner Steven Hoffman said that especially for small businesses, not knowing where to go for a bank, and not having any banks currently lending to marijuana businesses makes operating a challenge.