July 14, 2017; USA Today
The National Organization for the Reform of Marijuana Laws (NORML) was surprised last month to find that all seven of its regional bank accounts at PNC had been closed without notice. The Marijuana Policy Project, another marijuana legalization advocacy group that had its money at PNC also found its accounts closed.
Apparently, both groups, neither of which sells marijuana, were booted in what may have been an overabundance of caution by the bank, which seems to have been scared off by U.S. Attorney General Jeff Sessions’ continuing obsession with legalization laws. Sessions recently asked congressional leaders to have Congress reconsider a rule enacted in 2014 that prohibits the use of federal funds by the Department of Justice to block state laws that legalize medical-marijuana cultivation and use.
Not that PNC would ever outright admit to that. “PNC does not comment on customer accounts,” said Diane Zappas, director of corporate reputation. “As a federally regulated financial institution, PNC complies with all applicable federal regulations.”
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NORML’s national political director, Justin Strekal, said that a number of new chapters have also had trouble establishing accounts. “This is something coming from an understandable concern regarding the Trump administration and Attorney General Jeff Sessions’ open hostility to marijuana,” he said.
But Taylor West, deputy director of the National Cannabis Industry Association, said he would not absolve the banks so easily. “It’s a dangerous precedent for a bank to shut down someone’s account just for the position they advocate.”
The threatening stance being taken by the feds could also scare away investors to the industry and doctors willing to participate in medical marijuana programs. “The biggest effect that all of this noise has is on investment. That’s where the rubber really meets the road in the marijuana space,” said Jeremy Unruh, general counsel for PharmaCannis, which owns four dispensaries in New York state. “We can’t go to a bank and secure commercial loans or construction loans.”
“The institutional money is just beginning to creep into the cannabis space, slowly. So this noise at the federal level makes those investors question their strategy,” he said.—Ruth McCambridge