There are at least six financial institutions serving Massachusetts’ cannabis industry – double the number from just three years ago, MassLive reports. The new banking institutions include Eastern Bank, which is taking over Century and its cannabis division, and Avidia Bank, but Cannabis Control Commission Chair Steven Hoffman declined to name the third.
“I continue to have conversations … with new banks who are starting due diligence around entering the industry. We will continue to see new entrants.” – Hoffman to MassLive
In 2018, just Century, BayCoast Bank, and GFA Federal Credit Union served cannabis clients. Hoffman noted that he knows that, given federal law, “any bank that is servicing the cannabis business is taking some risk” but that he is “grateful for those who have stepped up because they have made an incredible contribution to public safety.”
Last week, the U.S. House of Representatives passed – for the second time in as many sessions – the SAFE Banking Act which would remove that risk from the equation for financial institutions as it would explicitly allow state-approved cannabusinesses to access financial services.
That bill was squashed last session by the then-Republican-led Senate.
Gary Vierra, senior vice president and chief risk officer for BayCoast, said some of its clients are “looking for a lending relationship.”
“With the risk of the industry, there is a lot of restrictions in the space. Our commercial lending group underwrites,” he said to MassLive. “We require the relationship be with us so we can oversee it from a compliance standpoint as well.”
Last month, the federal Financial Crimes Enforcement Network (FinCEN) reported that, as of November 2020, 515 banks and 169 credit unions served the cannabis industry nationwide. The number of banks and credit unions had initially fallen from November 2019 to December 2020.
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