Vancouver credit union pulls support for illicit cannabis businesses
One of the last standing financial institutions offering services to Vancouver’s illicit cannabis businesses has been forced to cease its support.
A major pain point for both Canada’s black market and legal weed sector has always been the storage and transfer of funds. Today, that became increasingly difficult for a number of B.C. businesses. Once dubbed the “activist credit union”, CCEC—a single-branch, independent institution located on Commercial Drive—has sent out a wave of letters to account holders of illicit cannabis businesses. As it states in the partially redacted letter of a now-former account holder, recent enforcement of “regulatory requirements with FINTRAC and anti-money laundering legislation” means CCEC’s non-compliant account holders have until the end of the month to settle their accounts. This includes providing an address of where the remaining funds can be sent. According to the anonymous source, incoming funds will also no longer be transferred to or from existing accounts unless to remove funds from the bank all together.
CCEC was once known for its outspoken support of community, mom-and pop weed shops, long before legalization occurred, but not without cost to the account holder. In 2015, the general manager of the credit union told the Globe and Mail it served over half-a-dozen of the city’s dispensaries, saying, “every transaction is reported to Canada's financial intelligence agency, as required under federal banking rules.” Shortly after, the bank began charging $500 per month to ensure their continued compliance with Canada’s regulatory system.
According to tips reported to Inside the Jar, similar letters have gone out to at least five dispensaries, mail order marijuana (MOM) businesses, and head shops across the city in the last week.
Despite well over a year having passed since the legalization, licensed companies are still struggling to establish a secure financial institution amidst the conservative lot of Canada’s big banks. Bank of Montreal became one of the first major banks in the country to open accounts to the new sector, with institutions like Royal Bank of Canada since following suit. But it’s been a slow changing of tides as traditional bookrunners cling to their pre-legalization policy.
Considering CCEC was one of the only banks to openly support the remaining unlicensed businesses, it will likely be back to keeping cash in storage units and safes for the affected business owners.
CCEC has not responded to a call for comment, so the catalyst behind the closures remains currently unknown. ITJ will provide an update upon receiving more information.
This article is available under a Canadian Creative Commons licence.