Two top banks in Canada have decided they will no longer do business with companies in the marijuana industry.
Scotiabank and Royal Bank of Canada won’t open new accounts with cannabis-related businesses and have canceled existing ones. Though marijuana appears to be moving toward legalization in Canada, the banks concluded that the industry is still too risky.
Royal Bank confirmed that it will no longer provide services to companies that produce or distribute marijuana. The rules at Scotiabank are much stricter. CBC News reports that the bank has canceled an account with Hemp Country, a small business that doesn’t actually sell marijuana but sells related paraphernalia.
“It’s kind of insulting really, especially when legalization is right on the horizon,” Nathan MacLellan, Hemp Country owner, told the CBC. MacLellan, who had been with Scotiabank for about 10 years, added, “Nothing in the store that we sell is illegal. Every single variety store sells pipes and bongs nowadays, so why are they singling us out all of a sudden?”
A Scotiabank spokesperson said the decision “stems from a reassessment of our risk management practices. While we strive to be the bank of choice for our small business clients, and we are proud of the strong relationships we have built in all of our communities across Canada and abroad, we must balance that with our commitment to effectively manage all business risks.”