Puerto Rico medical cannabis industry left without banking institution
SAN JUAN – Tu Coop, the only banking institution providing financial services to medical cannabis businesses in Puerto Rico, will stop doing so, leaving the fledgling industry without banking service.
While the medical cannabis industry is legal in Puerto Rico, it is illegal federally. Therefore, commercial banks and many financial institutions refuse to provide any financial services to the many medical cannabis dispensaries.
The cooperative sector, which is regulated by local law, was the only one providing such financial services to cannabis-related concerns. At first, two credit unions provided the service. However, Sol Coop ceased providing services to the industry in 2017, leaving TuCoop as the sole provider.
With Tu Coop dropping the service, the medical cannabis industry will not be able to carry out, for instance, electronic payments such as the ones required to the Treasury Department.
Goodwin Aldarondo, head of Puerto Rico Legal Marijuana, confirmed the information first reported by Revistas Crónicas, the trade magazine that covers the cannabis industry.
Aldarondo said the move will not wipe out the industry, which “is here to stay,” but could make medical cannabis dispensaries a target of burglars who know these only take cash. “In Colorado, some clinics have to make underground safe deposit boxes,” he said.
The industry generates millions as there are currently 56,000 people certified to purchase medical cannabis in Puerto Rico.
The decision will make it harder for players in the ever-growing industry to pay the sales and use tax and the Municipal Revenue Collections Center.
“The question now is whether these institutions will now accept cash,” Aldarando said. “This will make it more difficult to regulate the industry,” he added.
The industry representative said Tu Coop has submitted in court an injunction to try to stop the move. The savings and loan association was forced to stop providing the service after it was informed by Banco Cooperativo that it would no longer provide the service.
“The problem was that no checks issued by Tu Coop were being accepted,” Aldarondo said.
Caribbean Business contacted Banco Cooperativo, whose president was not available for comment. It also contacted Israel Menchaca, executive director of Tu Coop, but he was unavailable for comment as well.