Home News Cannabis Industry Execs and Workers Can’t Get Mortgages, Bank Accounts

Cannabis Industry Execs and Workers Can’t Get Mortgages, Bank Accounts

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  • Cannabis-Industry executives and workers say they have been denied a mortgage due to banking problems.
  • Over 428,000 people work in an industry involved in conflicts between state and federal law.
  • Congressmen are aware of this issue, but passing the bill is a difficult battle.

When Sophia Patten and her husband were looking for a home in the bright red Los Angeles housing market, they knew they had to act fast.

Patten had a mortgage pre-approval in December, so he didn’t expect to be hiccups when he found a home.But Patten recently took on a new job at Workweek — Like many other media companies, I write about cannabis.

When it was time to buy a new home, it turned out to be an unexpected obstacle. It almost prevented them from buying the house they wanted, and they ended up paying their mortgages a much higher interest rate than they initially agreed. Patten’s brokers and banks blamed each other. But in the end, her work was indirectly tied to cannabis, so financial institutions were cautious about working with Patten.

Steven Kemmerling, CEO of CRB Monitor, a corporate intelligence company that helps financial institutions navigate the cannabis industry, told insiders that they often see these issues, but they won’t be fixed soon.

Sophia Patten

Sophia Patten.

Courtesy of Sophia Patten.

Banks are wary of taking risks

“Getting a loan or bank account remains a challenge for everyone in the industry,” he said. He added that business owners and business owners tend to face problems more often than other workers.

Technically, it’s not illegal for banks to offer mortgages to people working in the legal cannabis industry. But banks tend to be conservative and wary of taking risks, Mr. Chemering said. Therefore, in most cases, they will refuse to work with anyone in the industry, whether legal or not.

Their alertness stems from the fact that cannabis is illegal by the federal government. Despite the fact that nearly 20 states, including California, have legalized their use for recreational purposes., And many even legalized it for medical purposes. According to the cannabis information site Leafly, this is a headache for people working in an industry that employs more than 428,000 people.

“There is still some discrimination.”

Several other cannabis executives also told insiders that they had experienced banking problems.

Jeffrey Herold, CEO of Massachusetts-based cannabis company Garden Remedies, ran into problems last year when he and his wife tried to buy a home.

Herold told insiders that their mortgage was denied within a week when they were supposed to close their new home. They had already sold their old homes, so they were left scrambled.

They eventually removed his name from the loan and put it in his wife’s name. However, they worked to solve the problem, so they had to stay at the hotel for a few weeks and paid an extra fee to resume the mortgage process.

Jeffrey Herold.

Jeffrey Herold.

Courtesy of Jeffrey Herold.

“I don’t think people are aware that there is some discrimination in the state of cannabis, not only against businesses but also against individuals,” Helold said.

Nicholas Vita, CEO of New York-based cannabis company Columbia Care and former Goldman Sachs banker, told insiders in November that a major bank had canceled a personal check account because it worked in the cannabis industry.

“When I was a kid, I was mowing the lawn in my neighborhood, so I started a checking account at the age of eight,” Vita said.

Bank invoices may not be an easy solution

Legislators are aware of this issue, but have not been very successful in passing relevant legislation. SAFE Banking Act, bipartisan bill Will allow banks to work with state law cannabis companiesI have passed the House of Representatives six times in the last few years, but have repeatedly failed in the Senate.

Kemmerling told Insider that even if the SAFE method was passed, it would not be the “panacea” or cure that many would expect.

“Most financial institutions will still avoid the industry because the underlying activities remain illegal,” he said.

As for Patten, she and her husband finally got the house. But she said she had to go to a local credit union “11 hours”, so she ended up paying a high interest rate on her mortgage.

Realtors who have been doing this job for over 25 years were shocked by the situation, Patten said.

“She was like,’I’ve never experienced this in my career,'” Patten said.

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