The Bank of Guam has begun circulating a marijuana certification form requiring all current and new customers to declare that they are "not directly engaged in a marijuana-related business which in any manner is involved with the handling of marijuana or marijuana related products."

Customers are required to inform the bank if they do become associated with a marijuana-related business. The bank reserves its right to "immediately terminate any or all accounts" with any customer who becomes involved with the cannabis industry.

Bank of Guam Senior Vice President and communications officer Jackie Marati was not available for comment.

When shown a copy of the form, BankPacific President Philip Flores said BankPacific will soon be issuing a similar form and he expects all other island banks will as well, if they haven't already.

"Plain and simple," Flores said. "BankPacific will not have any banking association with any person or business involved in the marijuana business until (or) unless the federal law is changed."

Thirty-three states, the District of Columbia, Guam and Puerto Rico have all legalized the use of marijuana to some degree. Yet the possession, distribution or sale of it remains illegal under federal law.

Significant risk

Flores points to the American Bankers Association website, which advises all members that "any contact with money that can be traced back to state marijuana operations could be considered money laundering and expose a bank to significant legal, operational and regulatory risk."

The prohibition is mandated by federal law as well as by the Federal Deposit Insurance Corp. and the Internal Revenue Service, Flores said.

"When the (cannabis) industry actually gets up and running on Guam, we will make it very clear to our customers that we cannot have anything to do with marijuana (proceeds)," Flores said.

Banks' prerogative

"That's their prerogative," said attorney Vanessa L. Williams, who is the chairwoman of the Cannabis Control Board. "I understand they have to do that because they are subject to a lot of federal oversight."

Williams has already seen the Bank of Guam marijuana certification form and she is aware it's a hurdle that will have to be overcome in the future.

"We're going to be facing the same issues that other jurisdictions have," she said.

However, the first priority for the Cannabis Control Board, she said, is developing rules and regulations to guide the industry on Guam.

The board is meeting twice a month and she hopes a draft of the rules and regulations will be ready by September so that public hearings can be held soon after.

The banking problem "is one of the issues the board will have to address," Williams said.

"It's definitely something that we see and we're anticipating, (but) we have a few more bridges to cross before then."

Nationwide

"This is an issue for the banking system nationwide, which the Safe Banking Act seeks to address," said Sen. Clynt Ridgell, the author of the Guam Cannabis Industry Act of 2019.

The federal bill has bipartisan support in the U.S. Congress, Ridgell said, and it was recently approved by the House Financial Services Committee. Additionally, 38 attorneys general, including Guam Attorney General Leevin Camacho, support the Safe Banking Act.

There are other potential remedies, said Ridgell.

"In some states, some credit unions and even some banks are willing to accept proceeds from the cannabis businesses ... because in 2014 during the Obama administration, the Financial Crimes Enforcement Network issued guidance to banks on how to serve the cannabis industry legally."