Dedham Savings has launched a cannabis banking business, offering deposit accounts to licensed cannabis-related businesses in Massachusetts.
The bank in a statement today noted the rapid growth of the cannabis industry and the industry’s need to access financial resources and services.
“As a financially strong and independent community bank, Dedham Savings is uniquely positioned to meet the banking needs of businesses in this dynamic sector,” Peter Brown, Dedham Savings president and CEO, said in the statement. “We’ve committed significant resources, both human and technological, to ensure our [cannabis-related business] clients get the attention of their business needs and deserves.”
The bank said it offers deposit account and cash management services to cannabis dispensaries, cultivators, wholesalers, testing labs and delivery services.
“Many CRBs struggled to find a local bank willing to provide them with basic banking services due to the ambiguous legal status of marijuana as a federally prohibited controlled substance that is currently legal to purchase under the laws of most states,” the statement said. “This legal limbo effectively prevents many banks from providing banking services to CRBs. This greatly increases the risks to these businesses which are forced to handle and store significant amounts of cash.”
Dedham Savings said providing these businesses with access to conventional banking services would benefit local communities by reducing the risk of theft by moving cash from businesses to secure bank branches and by reducing costs to the business owner for security systems and staff required to count, log, package, store and transport cash.
Other benefits cited by the bank include providing efficient electronic banking transactions, including faster payment processing and simplified bookkeeping, and positioning businesses for future growth by documenting financial information required by lenders and investors.
The bank said it has a trained business development team with knowledge of the cannabis industry and its unique banking requirements. The team is also educated about federal and state laws that affect financial transactions for cannabis business.
Dedham Savings has about $1.9 billion and branches in Dedham, East Dedham, Needham, Norwood, Sharon, South Boston, Walpole and Westwood.
About a dozen Massachusetts banks and credit unions are involved with cannabis banking. Needham Bank recently entered the market by agreeing to acquire the cannabis banking operations Eastern Bank inherited in its merger with Century Bank. That business has about $500 million in deposits, and Needham Bank plans to open a branch dedicated to cannabis businesses. The Federal Reserve last month approved the deal, and Needham Bank as of the end of last month was waiting for approval from the Massachusetts Division of Banks.