Until now, Century had been tight-lipped about whether it would consider taking on recreational marijuana businesses in addition to its medical-marijuana customers. But in a rare interview related to the bank’s cannabis business, Sloane said the bank is sticking with just medical marijuana, at least for now.
“We only bank medicinal marijuana, and we will continue in that policy until and unless the federal law changes,” he said.
The reason Century is comfortable dealing with medical marijuana businesses, according to Sloane, is due to the so-called Rohrabacher-Blumenauer Amendment. That legislation, first passed in 2014, bars the U.S. Department of Justice from using taxpayer dollars to prevent states from implementing medical marijuana laws.
It does not, however, address recreational marijuana. “The regulations would need to change,” Sloane said, before Century would change its stance.
Other bankers have interpreted federal law differently — or at least, they believe the law is unclear enough at this point that it’s worth staying out of the marijuana industry altogether. In January, the Trump administration rescinded an Obama-era order that many viewed as giving banks leeway to do business with marijuana dispensaries.
While Century may be unwilling to take on the risks of banking an industry open to federal seizure, banks that are open to recreational dispensaries have said that supporting a community need is worth the inherent risk.
Tina Sbrega, CEO of GFA, said that the bank is in the business of analyzing risk, and that proper employee training and strict reporting adherence would be the way the bank would support a federally illegal industry.
It had been unclear if Century might venture into the adult use side of the marijuana market, given that at least one of its medical marijuana clients, New England Treatment Access, had started selling recreational cannabis.
Century is significantly larger than GFA and BayCoast. With nearly $5 billion in assets, it’s one of the largest banks headquartered in Massachusetts. GFA and BayCoast have $505 million and $1.6 billion in assets, respectively.
Kevin Fisher, a founder of NETA, told the Business Journal that the Northampton dispensary still uses Century for its medical marijuana business, but had established a banking relationship with an as-yet undisclosed financial institution for its recreational business. Fisher said NETA had signed a nondisclosure agreement with the institution for its recreational side of the business.
Beyond BayCoast and GFA, there may be more financial institutions that are banking adult-use cannabis. Salem’s Alternative Therapies Group confirmed that it has a bank for its new recreational marijuana business, though it declined to specify which financial institution.
More banks are needed, given that BayCoast has said it will only bank recreational clients that have a medical business. Additionally, GFA faces tight restrictions on which customers it can serve, given that it falls under government regulations that put geographic limits on its field of membership.