Banking is one of the largest challenges facing the cannabis industry. The Schedule 1 status of cannabis means that federal authorities could interpret any bank accepting deposits from a business that handles the marijuana plant, and then allowing that same business to take out withdrawals, as money laundering. For that reason most banking institutions do not want to risk opening bank accounts with state legal marijuana businesses.
Many states have mandated that all state legal marijuana be tested by a lab for molds, fungus and pesticides before the public can purchase it. Alaska mandates that all cannabis be tested and now one of its two contracted lab testing companies have been forced to close due to the Schedule 1 status of cannabis. Wells Fargo has called out the loan on Steep Hill Labs, Inc.’s location in Anchorage, leaving only CannTest open in Alaska to conduct all cannabis testing.
Wells Fargo is no stranger to the gray area of business though, accused of opening 3.5 million fake accounts for their customers and feeing them accordingly. They are in the crosshairs of the federal government already and may not want to irritate their vulnerabilities. There is also the possibilities that Steep Hill was having a dispute with Wells Fargo and so the massive bank is simply using this as an excuse to call out the loan.
In a social media post Thursday morning, testing lab Steep Hill of Anchorage declared, “We are sorry to announce that Steep Hill Alaska will be suspending cannabis testing operations on March 31, 2018. We have to relocate because Wells Fargo called in the loan on our building. They will foreclose if we do not move out — just because we are a cannabis business!”
Brian Kennedy, a spokesman for Wells Fargo in Alaska, said by email, “It is currently Wells Fargo’s policy not to knowingly bank marijuana businesses, based on federal laws under which the sale and use of marijuana is still illegal.”
“To me, Wells Fargo is the real bad guy here. They could give a s—- about Alaska. Only 700,000 people in Alaska; that’s less than the city of San Francisco,” Steep Hill CEO Brian Coyle said said by phone on Friday morning. “We need to hold their feet to the fire. If they’re going to be doing business in Alaska, they should be following Alaska’s state laws.”
It is another 10th Amendment issue unfortunately which would need to be resolved by the Supreme Court. If a state has legalized cannabis and mandates that the cannabis be tested, then the federal government is interfering in state business by now allowing lab testing companies to work with banks for financing. There are a number of 10th Amendment cases being reviewed by the Supreme Court, including the PASPA decision.