Credit Unions Adapt to Pot Regulations
After reading the federal expectations and guidelines on how financial institutions could offer banking services to marijuana businesses, Jennifer Roberts, COO of the $207 million Obee Credit Union, never expected the Tumwater, Wash.-based cooperative would be able to serve the cash-rich pot industry.
“I read the Cole Memo and thought, there is no way our small credit union can do anything in this arena to comply, so we decided we were not going to get involved,” Roberts recalled.
Most financial institutions are wary about serving the marijuana industry because it could potentially create the compliance nightmare from hell, coupled with the possibility of federal crackdowns.
Despite initial serious doubts, Obee CU learned how to manage serving its marijuana business clients, even with all of the added layers of regulatory costs and scrutiny.
The $1.5 billon Numerica Credit Union in Spokane Valley, Wash. decided to serve the pot industry to allow marijuana entrepreneurs to deposit their business revenues and help keep their communities safe at the same time.
Recreational pot sales have exceeded more than $405 million since June 2014 in Washington, where 192 retailers and 550 processors and producers make legal weed available to consumers, according to 502data.com, a site that sorts and aggregates data from the state’s liquor and cannabis board.
Obee CU and Numerica CU are based in Thurston and Spokane counties, respectively. These counties accounted for $43.2 million, or about 10%, of the state’s total marijuana sales since June 2014. What’s more, some of Washington’s top retailers, processors and producers operate in these two counties.
Thurston County, which has a population of 252,000, posted $9.4 million in sales since June 2014. Eleven retailers and 35 processors and producers operate in that county, according to 502data.com. In Spokane County, which has a population of 471,000, marijuana sales have totaled $33.8 million since June 2014. Fifteen retailers and 100 producers and processors operate in Spokane County.
In neighboring Oregon, however, financial institutions are staying away from serving the pot business.
Oregon was one of the first states in the nation to approve the use of medical marijuana in 1998, and retailers began selling recreational pot on Oct. 1, 2015. State officials there are concerned these all-cash businesses will spark an increase in robberies and other crimes.
Find out how Washington credit unions are serving marijuana entrepreneurs and why Oregon credit unions are staying away from the pot business in the Nov. 18, 2015 print issue of Credit Union Times.