A credit union (CU) is now the first financial institution (FI) in Massachusetts to offer banking services to recreational marijuana companies.
GFA Federal Credit Union revealed to The Boston Globe that it has decided to enter the sector after a year of research and preparations. The move will allow consumers to pay for marijuana with credit cards, while enabling those in the cannabis businesses to bypass the risks and expense of dealing in all cash. After careful research, Tina Sbrega, GFA’s chief executive, said her credit union decided it could legally — and profitably — provide banking services to these businesses, and that it would actually improve public safety.
“We’re looking at a cannabis business as a legitimate business that wants to be recognized as such and that, without banking services, presents a tremendous public safety issue in our communities,” Sbrega said. “Otherwise, you’re talking millions and millions of dollars of cash on the street.”
GFA will begin accepting marijuana clients by October 1, offering basic services such as cash management, checking accounts, payroll, wire transfers and bill payments.
In June, a U.S. Senate panel voted to block an amendment that would allow banks to open accounts for marijuana businesses without being punished by federal regulators.
The current policy forces many marijuana businesses to operate on an all-cash basis, which is “a big problem because it’s great for organized crime, it’s great for money laundering, it’s great for theft and larceny, it’s great for cheating on taxes, it’s great for cheating on your payroll,” said Senator Jeff Merkley (D-OR), the sponsor of the amendment, before the vote. “We’re really facilitating crime by not enabling the banking industry to provide basic services.”
With more than $500 million in assets, GFA’s status as a federal CU should make it easier for it to do business with marijuana companies without coming under federal scrutiny. To launch the business, GFA is incorporating a new subsidiary and working with Colorado-based Safe Harbor, which partners with FIs to help them vet potential cannabis clients and ensure that they meet strict federal rules for handling funds.