Canada’s biggest financial co-operative is now accommodating clients who want to participate in the industry

Canada’s biggest financial co-operative has softened its stance on cannabis, and is now accommodating clients and members who want to participate in the industry.

“We have decided that we will support their needs if they want to go in this market right now,” said Guy Cormier, president and chief executive officer of Montreal-based Desjardins Group.

Do we want to invest in this market? Do we want to be a leader in this market? Totally, no Guy Cormier, Desjardins CEO

“Do we want to invest in this market? Do we want to be a leader in this market? Totally, no. But we will be there to do business with members and clients that we know very well.”

Cormier said Desjardins is already financing some “players” in Quebec, including with lines of credit, mortgages or long-term loans. And asked if they would help with financing in the capital markets, the CEO did not rule it out, although he said Desjardins would remain selective.

“We’re not closed for that,” Cormier said in an interview in Toronto on Thursday, the day after Canada officially legalized recreational cannabis. “If there is an opportunity, we will look at it, but it will be more case by case.”

“Do we want to invest and take a strong position on the market by investing directly in some players? Not necessarily. It will be case by case.”

Cormier’s comments were softer than those he made to the Quebec media in 2017, when he flatly ruled out any interest by Desjardins in the cannabis industry, noting their role as an insurer.

The cannabis industry has also been a sensitive subject for Canada’s big banks. In general, the major lenders have been leery of the marijuana industry, which remains illegal at the federal level in the United States, where a number of the banks do business.

Credit unions, however, may be more willing to deal with the cannabis sector, which Deloitte has projected could produce up to $4.34 billion in legal recreational sales in Canada next year.

Cormier, though, said that Desjardins was approaching the industry with caution, and he suggested that the credit union’s environmental, social and governance impact “filters” would also be in effect when it comes to cannabis.

“This is one aspect, that we will be part of this industry, prudently, carefully,” he said. “And we’ll look in the next few months, few quarters, few years, how it expands. But we will follow our members and clients if they need financing or some equity investment, if it’s needed.”

Do we want to invest in this market? Do we want to be a leader in this market? Totally, no. But we will be there to do business with members and clients that we know very well

Cormier also gave a speech to the Economic Club of Canada while in Toronto, in which he said he was focused on growing Desjardins’ overall business, including their credit union network in Ontario, which is already the source of 25 per cent of their total operating income.

“And a third of it comes from outside Quebec,” Cormier added. “We want to keep these numbers moving in the right direction in the next few years.”

To help get there, he said, Desjardins is eyeing new partnership opportunities or potential purchases over the next few years.

As an example, Cormier pointed to the collaboration between Desjardins and other credit unions on Aviso Wealth, an independent wealth management firm that Desjardins owns half of, and that Cormier noted now has more than 500,000 clients and more than $57 billion in assets under management and administration.

Overall, Desjardins has assets of $290 billion and booked $15.4 billion in operating income last year. It also acquired in 2015 the Canadian operations of U.S.-based insurer State Farm, turning Desjardins into Canada’s third-largest property and casualty insurer and fifth-largest life and health insurer, Cormier noted.

The credit union is busy rebranding those State Farm outlets, including those in Ontario and Alberta, in the mould of Desjardins Insurance, Cormier said. Desjardins also plans to herald the change with a major advertising blitz.

“So contrary to what some may say,” Cormier said during his speech, “Desjardins is a nationwide co-operative financial group that serves all Canadians across the country.”

• Email: gzochodne@nationalpost.com | Twitter: GeoffZochodne