Federal Business Development Bank won’t serve cannabis-touching businesses
Inside the Jar has learned that the Business Development Bank of Canada (BDC) is refusing to offer its services to cannabis businesses that work directly with the plant.
In a letter to a prospective client shared with ITJ, an analyst with the government-run development bank and crown corporation asserts that BDC will only offer its services to businesses in the industry that do not physically touch cannabis.
“Businesses supporting the cannabis industry that do not own or physically handle cannabis are eligible for services from BDC,” reads the letter. “More specifically, general contractors, equipment manufacturers, horticultural and other equipment/product suppliers are eligible.
“For now, businesses cultivating or selling cannabis (medical or recreational) are ineligible for BDC financing. This includes activities such as cultivation, production, testing, processing, transformation, packaging, distribution, import/export, or selling (wholesale or retail).”
In an email, BDC confirmed with ITJ that it is holding off on working with legal businesses that deal directly with cannabis and its derivatives.
“Cannabis is still a new industry. We are closely monitoring developments and observing where market gaps emerge,” wrote Oliver Breton of BDC’s media relations team.
“For example, we recently met with representatives from the cannabis industry to better understand the unique challenges faced by [small and medium-sized enterprises].”
While this is BDC’s current policy, Breton explained that the bank is working on better understanding the market before opening itself up to business from licensed producers, processors, and other related businesses.
“When it comes to specialized industries such as this one, we need to develop the expertise, grasp, as well as understand, risks and how we can mitigate them before we decide to participate or offer any type of services.”
BDC did not indicate a timeline as to when it might consider working with such businesses.
This article is available under a Canadian Creative Commons licence.