Scotiabank, Royal Bank of Canada Shutter Marijuana SMB Accounts

Marijuana-related SMEs in Canada got hit with some bad news over the weekend.

Scotiabank and Royal Bank of Canada announced they will no longer provide banking services to these businesses and will close existing bank accounts for small businesses in the marijuana industry.

One small business owner described the decision as “insulting.”

“It’s kind of insulting, really, especially when legalization is right on the horizon,” said Nathan MacLellan, the owner of Hemp Country, who told reporters that he received a letter from Scotiabank last month that warned his bank account would be closed. That’s despite the company, while selling marijuana-related products, not selling any of the actual drug.

“Nothing in the store that we sell is illegal,” he added in an interview with Huffington Post Canada. “Every single variety store sells pipes and bonds nowadays, so why are they singling us out all of a sudden?”

Reports said the banks’ decision to shutter small business bank accounts now has these companies scrambling to find a different banking service. The move also highlights the struggle of small businesses within the marijuana industry to access adequate financial services.

Across the border, in the U.S., similar struggles are hitting small businesses operating in states in which marijuana is legal. Federal law continues to make the business illegal, however, so national banks have shunned small businesses despite their legality within state lines.

“We consider our stringent risk management practices a key strength of our business,” said a spokesperson for Scotiabank on the decision to close marijuana SME bank accounts. “This is why the bank has taken the decision to close existing small business accounts and to prohibit the opening of new accounts for customers classified as ‘marijuana-related businesses.'”

The spokesperson added that Scotiabank may change its position on the matter in the future and that the bank would be watching the industry closely as efforts to legalize marijuana in Canada continue.

Earlier this month, reports emerged that said 30,000 responses had flooded into a government site after officials asked for comment on marijuana legalization. Government officials have also been working with Colorado and Washington in the U.S. to explore the logistics of marijuana legislation and legality. The Canadian Medical Association has recommended to the government that marijuana be legal for consumption over the age of 21.