Bulldog Federal Credit Union in Hagerstown, Md., this week announced it is prepared to begin offering banking services to Maryland’s newly launched medical cannabis industry.

David Barrett, president and CEO of the $147 million-asset credit union, told Credit Union Journal there are several reasons for Bulldog to make the move, including public safety and responding to the will of the Old Line State’s residents. After a four-year legal process to set up businesses and issue licenses, medical marijuana dispensaries began operating Dec. 1.

“Getting cash off the street was a major reason — we want to keep everybody safe,” he said. “Also, we believe these places are businesses. Medical marijuana was approved by a majority vote of the citizens of Maryland and they should be handled with the same respect as any other business — bookstores, liquor stores, cigarette stores. They should be able to write checks like a typical business can. They should not have to operate in all cash.”

Bulldog has not yet opened any business accounts for medical pot dispensaries, but Barrett said the credit union is in discussions with several companies. If and when cannabusinesses bring their accounts to Bulldog, they will be charged a $2,500 onboarding fee and then $1,500 per month.

The lobby of a Bulldog Federal Credit Union branch. The Maryland-based credit union is the first CU in the state to offer banking services to the state's legal medical marijuana industry.
The lobby of a Bulldog Federal Credit Union branch. The Maryland-based credit union is the first CU in the state to offer banking services to the state's legal medical marijuana industry.

According to Barrett, cannabusinesses can expect checking accounts, the ability to accept check deposits, domestic wire transfers and more.

“We also will offer customary business services, including internet accounts. The only service we will not offer is international wires, due to the nature of the beast,” he said.

According to local media reports, Severn Savings Bank in Anne Arundel County is the only other financial institution offering banking services to Maryland cannabusinesses.

Anyone who lives, works, worships or attends school in Washington County, Maryland, is eligible to join Bulldog Federal Credit Union, as can businesses and other legal entities and associations (clubs, groups and organizations) in the county.

The credit union released a statement saying entrepreneurs who meet the membership eligibility requirements, “will enjoy discreet and dedicated access to Bulldog’s team of medical cannabis banking professionals under a fair and competitive fee structure.”

“By providing safe, compliant, economical financial solutions to the entrepreneurs in Maryland’s medical cannabis industry, we hope to help them to realize growth and prosperity legitimately, and that will benefit not only our members, but our community at large and our local economy,” Barrett said.

‘Cross that bridge when we come to it’

Although medical marijuana has been legalized in 29 states — and just this week the Vermont state legislature added its name to the eight states plus the District of Columbia that have legalized adult recreational use — the drug remains illegal on the federal level, which has caused most financial institutions to eschew offering services to cannabusinesses.

This point was driven home Jan. 4, when U.S. Attorney General Jeff Sessions abruptly announced he was rescinding the Cole Memo. In a one-page memo to the nation’s federal prosecutors, Sessions wrote, “In deciding which marijuana activities to prosecute under these laws with the Department’s finite resources, prosecutors should follow the well-established principles that govern all federal prosecutions” by considering the seriousness of the crime and its impact on the community.

Barrett said the timing of the credit union’s announcement was “pure coincidence.”

“We were planning this well before Christmas," he said. "We decided to wait until after the holidays to put out our press release, and then Sessions said what he said.”

There is a federal law that offers protection to legal medical marijuana businesses: the Rohrabacher-Blumenauer Amendment, which prohibits the Department of Justice from using federal funds to interfere with state medical marijuana programs. The amendment was renewed in December. In addition, the Financial Crimes Enforcement Network, an agency within the U.S. Treasury Department, did not rescind the guidance it issued in February 2014 parallel to the Cole Memo.

The FinCEN guidelines outline how banks can serve state-compliant marijuana businesses.

“Bulldog appreciates the complex nature of Maryland’s emerging medical cannabis industry, and has developed a program that follows the rigorous compliance process as outlined by the state and FinCEN guidelines,” the credit union said in a statement.

Barrett said he is not concerned about increased regulatory pressure, nor is he swayed by reports some credit unions in Colorado have had to deal with examiners in their office every quarter since deciding to serve cannabusinesses.

“We are federally chartered and we have spoken to our federal regulator," the National Credit Union Administration, Barrett said. "Their position is they have no position. I interpreted that as NCUA saying they are not saying it is right, but they are not saying it is wrong.

“NCUA is not due here until the spring," he said. "We will cross that bridge when we come to it.”