Don’t Look Now But One Bank in Maryland Might Be Solving Marijuana’s Cash Problem
Since Maryland established its medical marijuana program, it has faced many of the same problems we have here in California. Chief among them: the banking industry’s unwillingness to do business with pot companies which are still considered to be in the illicit drug trade under federal law.
Enter the Severn Savings Bank, a community bank based out of Annapolis. It has been working with the industry, providing them with checking accounts, automatic transfer service, debit cards and more.
Could it be a model for community banks in other states?
In order to avoid federal scrutiny and comply with state law, there are some big things the bank won’t do. Severn isn’t making loans, for instance. But the significance of the services it does provide can’t be understated.
...the ability to pay employees through an automatic debit system, buy supplies with a debit card and purchase marijuana through wire transfers put Maryland pot businesses a step ahead of pioneers in such states as Colorado, California and Oregon, where industry observers estimate that 70 percent of marijuana businesses run on cash.
That bank was very quick out of the gate saying, ‘I want to work with the industry,’ ” said Jake Van Wingerden, who chairs a Maryland cannabis trade association and heads SunMed Growers, a licensed grower in Cecil County that has had an account with Severn for more than a year. “Everybody I talk to has accounts at Severn. . . . I don’t know how else we would do business.”
Right now, the bank doesn’t seem to have much competition, but that could soon change. And we might see other community banks eventually follow suit in pot legal states like California.