Licensed cannabis cultivators in Rhode Island are finding it difficult to operate their businesses, as many banks and credit unions have been unwilling to lend to them

BANKING & FINANCE | FOCUS

Lack of banking hinders R.I.’s cannabis sector

BY CASSIUS SHUMAN | Shuman@PBN.com

THE CANNABIS INDUSTRY MAY BE expanding in Rhode Island, but these types of businesses still struggle to find financial institutions that will provide financing or even take their deposits and open checking accounts.

It’s a challenge that many in the industry say must be worked out as Rhode Island leaders consider legalizing recreational marijuana and licensing retail outlets. Without banking services, these businesses operate in all cash, which could fuel crimes such as theft and robberies.

The problem is that banks and credit unions are wary of getting involved with cannabis-related businesses because the growth, sale and use of the substance remain illegal on the federal level, possibly exposing financial institutions to legal trouble.

As a potential solution, banking reform was urged in 2019 by attorneys general in 33 states, including Rhode Island, Connecticut and Massachusetts.

But even as Rhode Island prepares to expand the number of licensed medical-marijuana dispensaries from three to nine, the lending issue remains unresolved.

Only two of Rhode Island’s 16 state-chartered banks and credit unions are so far open to working with cannabisrelated businesses, but it’s a problem that Massachusetts officials have wrestled with since recreational marijuana was legalized in that state in 2016.

Steven J. Hoffman, chairman of the Mass. Cannabis

CONTINUES ON PAGE 21 OPENING THE DOOR: Frederick Reinhardt, CEO and president of Greenwood Credit Union, says the Warwick credit union started providing services to cannabis-related businesses in part because of safety concerns over operating a large all-cash enterprise.

PBN PHOTO/MICHAEL SALERNO

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