Canadian cannabis business owners say they’re being punished by big banks backing away from bud.
“They ditched me,” Clarke said in a phone interview.
He opened an account with the bank before receiving his licence to run, THC Distribution, calling it a cannabis accessories wholesale shop.
Two months ago, he got a letter in the mail from RBC that labelled his business, nestled in Newfoundland and Labrador, as “high risk” and notified Clarke that his account would be closed as of Oct. 11.
“The American stigma on cannabis is causing a ma-and-pa shop in Newfoundland to lose its bank account.”
The cannabis market has been put into a haze ever since resignations from executives at larger corporations in the industry and a rising number of hospitalizations from vaping-related illnesses in the U.S., where many states still haven’t legalized cannabis.
Thomas H. Clarke, owner of THC Distribution in Newfoundland and Labrador, says the Royal Bank of Canada closed his business account because it was deemed “high risk.” Thomas H. Clarke - supplied
RBC wrote in a statement that it can’t comment on the specific incident, but “evaluates banking relationships within the sector on a case-by-case basis.”
“Decisions are made against a number of factors, including: the nature of their business, their financial position, creditworthiness, their ability to comply with legal and regulatory requirements, as well as other factors relevant to their specific business,” read the statement.
“This issue has many dimensions and the law and regulatory framework for the sector continue to evolve. We will continue to take all factors into account within the context of our banking policies. Beyond that, we do not comment on our banking relationships.”
Clarke also approached Scotiabank, which declined to comment, BMO, which would not comment on the record about how it manages relationships with cannabis business owners, and CIBC, which noted it reviews opportunities on a “case-by-case basis,” an approach that all the large banks in Canada seem to be taking.
Lisa Campbell, CEO of Lifford Cannabis Solutions based in Toronto, is facing a similar dead-end with banks.
Campbell said she’s been a client with TD Canada Trust for more than 30 years, her personal portfolio dominated by cannabis stocks.
But when she met with a representative and submitted all the proper paperwork to open a business account with TD Waterhouse, she said her proposal was immediately flagged as “high risk.”
Campbell also said her non-profit organization, the Cannabis Beverage Producers Alliance (CBPA), has an account with TD, which “froze it, unfroze it, froze it and unfroze it.”
“Then we got a letter saying it would close the account and we had to take all the money out or else it would freeze our assets,” she said.
“It’s the ultimate irony with the anniversary of legalization next week.”
Campbell also said RBC and TD denied the CBPA efforts to open an account.
TD did not immediately respond to comment.
“Unfortunately, the Cannabis Beverage Producers Alliance is not the only organization in the legal cannabis industry who is subject to banking issues,” wrote Alanna Sokic, a senior consultant at Global Public Affairs, an organization with a spot on the CBPA’s board of directors.
“The inability to secure a proper bank account is a barrier to our attracting and onboarding new members and executing important advocacy initiatives. We look forward to working with the new federal Minister of Finance following the election to discuss long-term, tangible solutions to support the industry.”
“It’s a challenge that’s being faced by many businesses in the industry in this country.”
“They ditched me,” Clarke said in a phone interview.
He opened an account with the bank before receiving his licence to run, THC Distribution, calling it a cannabis accessories wholesale shop.
Two months ago, he got a letter in the mail from RBC that labelled his business, nestled in Newfoundland and Labrador, as “high risk” and notified Clarke that his account would be closed as of Oct. 11.
“I feel I’m being unfairly treated as a business owner in a legal industry and America has more influence on banks,” he argued.
“The American stigma on cannabis is causing a ma-and-pa shop in Newfoundland to lose its bank account.”
The cannabis market has been put into a haze ever since resignations from executives at larger corporations in the industry and a rising number of hospitalizations from vaping-related illnesses in the U.S., where many states still haven’t legalized cannabis.
Thomas H. Clarke, owner of THC Distribution in Newfoundland and Labrador, says the Royal Bank of Canada closed his business account because it was deemed “high risk.” Thomas H. Clarke - supplied
RBC wrote in a statement that it can’t comment on the specific incident, but “evaluates banking relationships within the sector on a case-by-case basis.”
“Decisions are made against a number of factors, including: the nature of their business, their financial position, creditworthiness, their ability to comply with legal and regulatory requirements, as well as other factors relevant to their specific business,” read the statement.
“This issue has many dimensions and the law and regulatory framework for the sector continue to evolve. We will continue to take all factors into account within the context of our banking policies. Beyond that, we do not comment on our banking relationships.”
Clarke also approached Scotiabank, which declined to comment, BMO, which would not comment on the record about how it manages relationships with cannabis business owners, and CIBC, which noted it reviews opportunities on a “case-by-case basis,” an approach that all the large banks in Canada seem to be taking.
Lisa Campbell, CEO of Lifford Cannabis Solutions based in Toronto, is facing a similar dead-end with banks.
Campbell said she’s been a client with TD Canada Trust for more than 30 years, her personal portfolio dominated by cannabis stocks.
But when she met with a representative and submitted all the proper paperwork to open a business account with TD Waterhouse, she said her proposal was immediately flagged as “high risk.”
“Any cannabis business is seen as high risk by Waterhouse. Due to banking regulations in the states they would be unable to approve it … I still can’t trust a bank I’ve been with since I was 4-years-old. I can’t trade with them.”
Campbell also said her non-profit organization, the Cannabis Beverage Producers Alliance (CBPA), has an account with TD, which “froze it, unfroze it, froze it and unfroze it.”
“Then we got a letter saying it would close the account and we had to take all the money out or else it would freeze our assets,” she said.
“It’s the ultimate irony with the anniversary of legalization next week.”
Campbell also said RBC and TD denied the CBPA efforts to open an account.
TD did not immediately respond to comment.
“Unfortunately, the Cannabis Beverage Producers Alliance is not the only organization in the legal cannabis industry who is subject to banking issues,” wrote Alanna Sokic, a senior consultant at Global Public Affairs, an organization with a spot on the CBPA’s board of directors.
“The inability to secure a proper bank account is a barrier to our attracting and onboarding new members and executing important advocacy initiatives. We look forward to working with the new federal Minister of Finance following the election to discuss long-term, tangible solutions to support the industry.”
“It’s a private business and let’s be real, there are risks off the top. I don’t know of any action that could be used except policy or legislative change,” Jordan said in a phone interview.
“It’s a challenge that’s being faced by many businesses in the industry in this country.”
