Even as the state of Oregon prepares for legalized recreational marijuana on July 1, there was a potential pecuniary setback last week for cannabis-related companies in the Pacific Northwest. As reported, the Gresham, Oregon-based MBank, which provides financial services to the marijuana industry, officially announced it will terminate all of its accounts with the legal weed sector in the next two months. MBank is the only institution in Oregon offering checking accounts to pot businesses, and their decision to break from banking with pot cultivators and providers will affect between 70 to 75 accounts in total, with most located in Oregon, and a few in Washington state.
MBank CEO and president Jef Baker explained that choosing to close pot accounts was due to the difficulty in complying with federal regulations required when engaging in marijuana money transactions. Despite having $165 million in assets, Baker told Willamette Week that MBank is “not big enough” to manage the regulatory stipulations. Though he ambiguously added the decision was motivated by “the cost, but not in dollars.”
Baker admitted MBank’s move away from the ganja industry will ultimately have a “negative effect” on other banks’ willingness to conduct business with pot companies. MBank is extending their cannabis clients a couple more months of service before closing their accounts in order to allow the companies to make the necessary adjustments to the harsh reality of conducting legal marijuana sales without banking.
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