Gary Vierra

With medical marijuana legal in Massachusetts since 2012 and recreational usage sanctioned by voters in 2016, the cannabis industry within the commonwealth continues to evolve. Ours is certainly not the only banking institution faced with the decision whether to accept deposits from the medical or recreational markets; we are not alone in this new journey as at least a few community banks and credit unions have added cannabis to the industries they serve – despite its current federal illegal standing. 

And like other banks, we entered this sector after extensive deliberation and months-long communication with marijuana dispensaries to better understand the business. Our due diligence also included comprehensive research on this embryonic industry that has the potential to be divisive. On balance, we have worked to develop a policy that keeps to our commitment as a community bank to serve all industries within our regional towns and cities. 

Our Cannabis Banking Division is headed by me, with an additional staff of three. Inquiries are fielded through my office; staff is available only by appointment to dispensaries and other cannabis-related businesses that are interested in obtaining banking services and can demonstrate that they are licensed or otherwise authorized to operate under state law. As additional cannabis industry clients come on board, we will increase this division’s staff. 

We are keenly aware that feelings run strong on both sides of the marijuana issue. It is relatively new ground in Massachusetts and as such we are continually monitoring the cannabis industry in an effort to ensure that establishing a division specific to marijuana businesses is in the best interest of the communities we serve. 

A Mission to Serve 

That “best interest” extends to a concern for security. There exists considerable risk to those in the cannabis business – and by extension, to regional citizens – in the absence of available banking solutions.  

The sale of cannabis by licensed dispensaries typically involves cash as payment. This action results in dispensaries, vendors and other merchants exchanging and transporting large amounts of cash, which in turn, leaves those in the chain of currency custody vulnerable to theft, as well as those who knowingly or unknowingly are in close proximity.  

If there is cash on the street there is a decided safety issue, not only for the owner and/or employees of a cannabis business but also for the community at large. 

Ultimately, the mission of a community bank is to accommodate the banking needs of the people it serves. Those needs are fluid and ebb and flow with the times. Our bank, like all others, is serving a far greater and more diverse number of industries than when we were first chartered nearly 170 years ago. Case in point is the cannabis industry, which although currently in its infancy, is expected to grow exponentially over the course of a mere few years. 

Banks like ours doing business with the cannabis industry are well aware of the related risk tolerance, an issue that will remain until such time as marijuana is legalized at the federal level or Congress passes legislation protecting financial institutions that conduct commerce with legal marijuana businesses. To that end, we must continually work to minimize that risk beginning with a robust compliance program. 

Yes, the risks exist for community banks venturing into this 21st century industry, but financial institutions with a mission to truly serve their communities will continue to do what many have been doing since the 19th century – recognizing and then doing something about unmet needs. 

Gary J. Vierra is senior vice president and chief risk officer at BayCoast Bank, headquartered in Swansea with locations in Massachusetts and Rhode Island.