Bank of Springfield, which reportedly handled 70 percent of the medical cannabis banking in Illinois, announced it is pulling out of the business in May.
The banking industry is reluctant to participate because there are still federal laws on the books that make marijuana an illegal substance – despite its legalization in a number of states for both medical and recreational use.
“Any time you have a program like this it’s relatively unique in that it operates in direct contradiction to a known federal law,” said Bob Morgan, the former director of the state’s Illinois Medical Cannabis Program. He is a medical cannabis attorney at the law firm Much Shelist.
“Everyone knows that medical cannabis is still a violation of federal law even if it’s allowed under state law. So the Bank of Springfield moved into servicing this industry knowing the situation, but I understand constantly looking at the risk and the considerations of whether or not to service the industry,” he said.
The bank’s decision has left cannabis growers and dispensaries scrambling to find a bank that will risk taking their money.
“It’s certainly a kick in the gut to the operators of the industry. No doubt about it,” said Mitch Kahn, the vice chair of the Medical Cannabis Association of Illinois. Kahn is also CEO of Greenhouse Group and Grassroots Cannabis.
“Everybody is scrambling and working together to identify institutions both in the state and out of the state to try to solve the problem,” he said.
In Illinois, cannabis is currently an all-cash business, and with the biggest bank now turning away, growers and sellers are in a bit of a pickle.
“There certainly is no benefit for anybody from a public safety perspective,” said Kahn. “There is no benefit at all for this industry to try to run on cash. It seems like we’re asking for trouble if we do that.”
Illinois State Treasurer Michael Frerichs signed on to a letter to Attorney General Jeff Sessions asking for a dialogue to work out these issues.
Meanwhile at the state capitol, state Sen. Don Harmon (D-Oak Park) just passed a bill out of the Senate that would allow people with opioid prescriptions to go straight to the marijuana dispensary instead. The bill is headed to the House where state Rep. Kelly Cassidy (D-Chicago) is the sponsor. (Find a list here of qualifying debilitating conditions for medical marijuana. People with a terminal illness can find information about qualifying here.)
“None of the patients can wait the 90-100 days patients are waiting for their [medical cannabis] cards,” said Cassidy. ”But risking a life-destroying addiction is unacceptable. Other sections seek to address the longest wait times in the country.”
But not everyone is convinced that marijuana is the solution for pain.
“So the biggest issue right now is not that you can use marijuana to numb pain – which you can – that’s true. The biggest problem right now is that we have very flawed medical marijuana system and pain’s something that’s entirely subjective,” said Dr. Aaron Weiner, the director of Addiction Services at Linden Oaks Behavioral Health and a spokesman for Smart Approaches to Marijuana, a nonprofit advocacy organization opposed to legalizing marijuana.
“Marijuana is an addictive substance. I run outpatient treatment centers. It’s the second most common drug that we treat here behind alcohol. And it’s not actually a solution to pain, it just numbs the pain. So you’re trading one addictive drug, an opioid, to another addictive drug – neither of which actually resolves the pain. I’m concerned that people are going to go to that before they go to other options that also are effective for pain like physical therapy, massage, acupuncture, behavioral therapy, and spinal cord stimulators,” added Weiner. “There are so many options. And I’m concerned that people are going to just go to marijuana well before they actually should.”
There is also a battle in court over allowing people with “intractable” pain the right to use medical cannabis. The Illinois Department of Health is appealing a judge’s ruling to add intractable pain to the list of approved medical conditions to receive medical marijuana.
Frerichs, Morgan and Weiner join us in discussion. We invited the Illinois Department of Public Health to join us also. They declined.