Illinois Bank Cutting Ties With Medical Marijuana Industry
The landscape of the medical marijuana industry in Illinois could soon be changing as a major player has announced that it will be getting out of the game by next month. The announcement comes in the wake of indications by the Trump administration that it will be ending Obama-era leniency on the federal prosecution of marijuana as an illegal drug.
Bank of Springfield recently notified its customers in the marijuana industry that their accounts with the bank will be closed on May 21. According to reports, the financial institution is the “main bank serving Illinois medical marijuana companies,” which include cultivation centers and dispensaries. Bank of Springfield is not the only institution serving the medical cannabis industry, but its customers say other banks charge up to six-figure annual fees for marijuana-related accounts. Most companies simply cannot afford the added expense.
Restarting the War on Marijuana?
A spokesman for Bank of Springfield told news outlets that the uncertain legality of medical marijuana has become problematic in recent months. “The bank will not jeopardize any of their customers by working with businesses that operate the legal gray area,” the spokesman said.
The uncertainty stems largely from a memo issued by U.S. Attorney Jeff Sessions earlier this year. The memo rescinded previous directions given by the Obama administration starting in 2009. The Obama-era memo clarified that using federal resources to crack down on state-legalized medical marijuana was deemed inefficient. Subsequent Justice Department directives afforded states the freedom to create their own regulatory systems to address threats created by the legalization of recreational marijuana.
Attorney General Sessions’ memo, however, did not clarify the Justice Department’s approach to marijuana enforcement, claiming that specific guidance was not necessary. The memo simply reiterated that Congress has determined that marijuana is a Schedule 1 controlled substance “and that marijuana activity is a serious crime.”
A Wake-Up Call for Banks
The Obama administration’s guidance on marijuana provided protection for banks that kept in careful compliance with state and federal laws. With that protection now gone, financial institutions are understandably concerned that they could be seen as dealing in drug money.
Many cultivation centers and dispensaries with no other banking options are shifting to a cash-only model. Unfortunately, doing so creates additional security concerns and logistical complications, especially regarding tax reporting and large purchases. “At the end of the day,” said one dispensary owner, “the bank is protecting themselves, and it just makes it tougher for all of us.”
Drug Crimes Defense Attorney
It is difficult to say for sure how the new Justice Department approach to marijuana will affect the average citizen, but the situation has certainly become more complex. If you or someone you love is facing drug-related charges, contact an experienced Will County criminal defense lawyer for help right away. Call 815-740-4025 for a free consultation at the Law Office of Jack L. Zaremba today.