People are increasingly using medical marijuana in place of pharmaceutical drugs to treat disorders. (Photo: REUTERS/Chris Wattie)
Two major Canadians banks decided that they will no longer give accounts to businesses that sell anything from medical marijuana to bongs.
Royal Bank of Canada and Scotiabank have chosen to end their relationship with companies in the controversial industry, even though legislation to legalize marijuana is going to be introduced in spring 2017.
The move has left some business owners scrambling to set up alternative accounts in order to keep their businesses going, such as Nathan MacLellan, the owner of Hemp Country, which sells pipes and bongs.
It has also left MacLellan scratching his head over his account cancellation saying, "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?"
That’s certainly a good question, so what is behind the move?
Some say that the banks are trying to be cautious, because the legalities around marijuana are still uncertain. The banks are even being cautious in answering why they made this move, with Scotiabank spokesman Rick Roth telling CBC News in an email, that due to “privacy issues,” the bank is unable to comment on specifics except to say that they “manage risks soundly while making prudent business decisions".
It seems rather strange that these banks are pulling out of doing business in the marijuana industry, given that profits from marijuana sales are expected to rise the closer we come to the legalization deadline.
Could one of the factors behind the move be pressure from the pharmaceutical industry to stop doing business with an industry that threatens their bottom line?
People are increasingly using medical marijuana in place of pharmaceutical drugs to treat disorders, which has been proven to lower prescription drug use, according to a University of Georgia study.
The 2013 study looked at the cost of prescription drug benefit programs in U.S. states that allowed for the use of medical marijuana, and found that the savings from lower prescription drug use was $165.2 million for that year alone.
On the other hand, if marijuana companies could no longer accept debit and credit card payments, that would certainly make it harder for them to do business.