A credit union will launch a pilot program to begin serving marijuana businesses in Alaska, giving the cash-reliant industry a financial option after banks shunned the industry.
Most banks and credit card processors in the U.S. won't service marijuana businesses because of the federal prohibition on marijuana.
Credit Union 1 announced its decision Thursday and said it comes with no political or moral position on marijuana.
Safety concerns were a significant factor, and providing the service would keep massive amounts of cash off the streets, according to CEO James Wileman.
"It's a lot of cash," he said. "Imagine running your own life without having access to banking."
The state-chartered credit union also strives to provide services to the underserved, Wileman said, adding, "this segment of business is completely not served."
He expects the pilot program to begin in the first half of 2019.
Kelly Mazzei with the state's tax division said the agency supports the move as a time-saver because it will cut down on counting cash. "This is extremely good news for the state," she said.
In taxes alone, the industry in Alaska paid the state nearly $11 million between January and September, according to Department of Revenue figures.
Marijuana businesses are ecstatic about the option, said Cary Carrigan, executive director of the Alaska Marijuana Industry Association, which represents about 120 retailers, manufacturers and cultivators. Only a handful of businesses will initially participate in the pilot program, but others also want to join, he said.
"The consensus is, 'What took so long?'" he said.
Alaska voters in 2014 approved so-called recreational use of marijuana by those 21 and older, with the first licenses issued in 2016.
Anchorage attorney Jana Weltzin said most of her Alaska marijuana business clients are excited about an opportunity to participate because it would free them from having to keep so much cash in their homes or vehicles. Some of her clients are among the few to take part in the pilot effort.
Weltzin lauded the credit union for being "brave enough" to implement a system.
"It's an inevitable step for a financial institution to take if they want to participate in this industry that's generating a lot of money," she said.
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