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V O L . X X V N O. X X V I I N OV E M B E R 2 5 , 2 0 1 9 16 B A N K I N G / F I N A N C E think lot of people have been putting cash under the mattress or working with vendors who take cash. But that can make people less accountable, not more." e cannabis industry is as reliant on cash trans- actions as it was before legalization. Caught between state and federal Passage of the act would ease banks' concerns about legal risk, says Kennebec Savings Bank President and CEO Andrew Silsby, who has been part of several delegations to Washington, D.C., to support the bill. "e financial services industry is caught between state and federal law," says Silsby, whose bank has $1.1 billion in assets and five branches. Financial institutions are at prosecutorial risk if they're seen as aiding and abetting activity considered illegal at the federal level, he explains. "We would never do that knowingly," Silsby says. "But the challenge is, where does legal state activity turn into illegal federal activity? I'm looking and all the other banks are looking for clarity on that." C O N T I N U E D O N PA G E 1 8 » P H O T O / T I M G R E E N WAY F O C U S Josh Quint Josh Quint, director of operations , director of operations at at Canuvo Canuvo, says getting traditional , says getting traditional financing for anything from bank financing for anything from bank loans to leases continues to be a loans to leases continues to be a challenge for cannabis companies. challenge for cannabis companies. I think lot of people have been putting cash under the mattress or working with vendors who take cash. But that can make people less accountable, not more. — Josh Quint Canuvo I t was five years before the medical marijuana cul- tivation and dispensary company Canuvo could find a traditional financial institution that would allow it to maintain a deposit account. "For the first five years, we lost a bank account every year," says Canuvo's director of operations, Josh Quint. e company's founders, Sage and Glenn Peterson, also lost their personal accounts during that time. "e way it was, we'd go in, explain who we are, what we do and what we were looking for, which was traditional depositing and check-writing," says Quint, who is the Petersons' son-in-law. "For the most part, banks would say 'OK' and we'd bank with them awhile. But then they'd do their yearly compliance audits and we'd be kicked out." Maine legalized medical marijuana in 2010 and vot- ers approved the use of recreational marijuana in 2016, though many of the regulations are still being ironed out. Even while 11 states have legalized recreational marijuana use, federally chartered banks have been rele- gated to the sidelines of the growing cannabis industry. Cannabis remains illegal on the federal level. A number of Maine bankers have backed the Secure and Fair Enforcement Banking Act of 2019, known as SAFE Banking Act (HR 1595). If adopted, the proposed federal measure would allow legal mari- juana and related businesses to access banking ser- vices and would bar federal banking regulators from taking certain actions against financial institutions for providing those services. e bill, co-sponsored by U.S. Rep. Chellie Pingree, D-Maine District 1, and U.S. Sen Angus King, I-Maine, passed the House last month and is being considered by the Senate. Although Canuvo eventually found a financial insti- tution to take deposits, it still can't get a traditional loan. "It's ridiculous for cannabis businesses not to be able to do traditional banking," says Quint. e result? "I Tapping Tapping AN BUSINESS BUSINESS All-cash All-cash All-Cash Banks look for legal ways into cannabis lending B y L a u r i e S c h r e i B e r

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