We have heard from many of you looking for information on working with or for businesses in the cannabis industry. If you are currently employed in or serving any clients in this area, please let us know.
The decision to work in this area, either as an accountant on staff or as a firm providing services, is one that requires careful consideration. To get some ideas on what is involved I sat down with Jack Lawson and his team at Clearwater Credit Union in Missoula. Clearwater’s Mission is: To be a force for good in banking, in the communities we serve, and in the lives of our members.
In 2017, Clearwater staff noticed a transaction related to licensing a cannabis entity in Montana. The initial reaction was to simply close the account. As management considered the issue an interesting conversation happened. Someone asked, what happens if no bank or credit union serves this industry? The group agreed that these businesses would continue to operate in cash and that would result in greater risk of crime in the community. They decided serving these businesses could be a force for good in the communities Clearwater serves. Once the initial hurdle of if they should serve the industry was cleared, the next questions were how do they serve this industry.
The first steps were to talk to other banks and credit unions serving the industry and engage legal council to find out what is needed to do the work. Next, they educated their board and created a plan to learn the industry, grow the line very slowly, and be highly transparent with their regulators. The plan included investments in legal, compliance, and dedicated staff. They also decided to price their services to cover costs.
“We are going to cover cost and provide what we think is a community service.”
– Jack Lawson
Another critical aspect of their plan was a commitment to continued learning. Part of this learning involves staying up to date on evolving rules and regulations. As Montana introduces recreational marijuana and the federal government considers legalizing providing services to the industry, Clearwater continues to evaluate if and how they serve the industry. They also continue to invest in their staff and processes to ensure they meet all the required regulations and provide the best possible service.
What can we all learn from Clearwater Credit Union’s example?
Start by considering how working with this industry fits with your mission or values. Ask yourself how you would explain working with this industry to current clients. If you are considering working for a business in this industry, how could this impact your resume in the future? If you decide working with this industry makes sense, the next step is to get up to speed on the risks involved and how to best work with the industry.
An important consideration for CPAs is how working with this industry would impact your license to practice. The Montana Board of Public Accountants made the following motion as it relates to license holders:
Moved that staff is directed to administratively close complaints where the sole basis of the complaint is the licensee is providing services to a marijuana based business that is legal under state law, with the addition that the screening panel will consider any cases in which the licensee has been convicted of a crime.
The implication of this is your license would not be put at risk from a complaint, BUT (and this is a huge but) if the federal government found you guilty of breaking the law your license would be at risk. Currently CPAs serving the cannabis industry could be found guilty of breaking federal laws. The House passed H.R.1996 – SAFE Banking Act of 2021 on 4/19/2021. If this bill passes the Senate and is signed into law by the President, it would allow service providers to provide service to legitimate cannabis businesses.
Section 3 of the bill is particularly important to not only marijuana businesses but everyone who might do business with a marijuana-related company. This section would protect ancillary businesses like real estate owners, accountants, electricians, and vendors by clarifying that the proceeds from legitimate cannabis businesses are not illegal under Federal laws. This proceeds section is the key provision, allowing all cannabis-related businesses and their service providers to access the banking system without fear of reprisal.
– Representative Perlmutter
If you find that you are interested in working with the cannabis industry and are comfortable with the risks involved, the next step is to learn more and talk to others who are already serving the industry. A great opportunity to do this is by attending the Bottles, Brews & Buds Conference presented by the Alaska, Colorado, Hawaii, Idaho, Montana, Oregon, and Washington Societies of CPAs. More information can be found here: