Bank of America Throws a Wrench in the Gears of a Local Cannabis Organization

Bank of America Throws a Wrench in the Gears of a Local Cannabis Organization

The Valley is home to one of the highest-profile cannabis research institutions in the U.S.: The Scottsdale Research Institute, founded and run by former University of Arizona professor Dr. Sue Sisley.

Earlier this year, SRI entered into an agreement with the Drug Enforcement Agency to grow high-quality cannabis for the Food and Drug Administration, receiving a blessing from the U.S. government to operate legally.

The agreement was a pretty big deal: As cannabis has been legalized in some form or other in a majority of states, the federal government has loosened its stance on research, but still only allows a handful of facilities to grow commercial-grade cannabis for study. SRI was an early recipient of a license to grow.

Now, though, the group must search for a new financial institution, in the wake of Sisley's announcement last week that Bank of America had abruptly terminated all SRI banking services. A letter dated Oct. 12 informed Sisley that account activity would be restricted three weeks from the notice and permanently closed 30 days from that time, advising SRI to stop writing checks immediately and cancel any ongoing payments.

“There was no negotiating, no warning, no ability for us to speak to somebody who could review our operating agreement with DEA,” Sisley told New Times via text. Her organization had been working with the bank for ten years, Sisley said.

“We have a contract with DEA: We are growing cannabis for FDA clinical trials and selling it to the DEA,” Sisley said. “[This is] further proof that the word 'cannabis' continues to be completely radioactive even though this is a 100% federally legal operation.”

Bank of America's concern is presumably rooted in the fact that marijuana remains federally illegal. There have been efforts to change that. The Secure and Fair Enforcement (SAFE) Banking Act was recently attached to the National Defense Authorization Act for FY 2022 by Congressional Democrats in an effort to circumvent Republicans bent on halting progress on legalization efforts.

The law would allow “legitimate” cannabis businesses to operate like any other legal business, with access to a full range of banking services.

SAFE enjoys wide support, both in the cannabis banking industries, but Republicans in the Senate have consistently killed any efforts to pass it and any other legislative attempts on the federal level.

“With legalization polling at all-time highs and myriad states operating controlled markets for both medicinal and adult-use, it is past time for the cannabis industry to be able to enter into relationships with banks and other financial institutions,” Arizona NORML Director Mike Robinette recently said. “The SAFE Banking Act would enable state-licensed and legitimate cannabis businesses to be able to operate like all other legal businesses.”

The bill passed through the House as part of the NDAA funding package in a 316-113 vote on Sept. 23 and will head to the Senate, where it will likely die unless it gets bipartisan support. This is the fifth time House Democrats have introduced the bill in some form.

Not all Democrats may be on board though, as Senate Majority Leader Chuck Schumer (D-NY) and Sherrod Brown (D-OH), who chairs the Committee on Banking, Housing, and Urban Affairs, may hold out for more comprehensive legislation, such as the Cannabis Administration and Opportunity Act, or the Marijuana Opportunity Reinvestment and Expungement Act of 2021 (H.R. 3884—MORE Act).

As to SRI and its work, Sisley said the only way to move forward is to not look back. She says she's received some "nice responses" from state banks that she believes will allow SRI's clinical trials to continue moving forward.

"Fortunately, there are banks that care about the progress of federally regulated and federally legal research and are eager to step up and support us immediately," she said. "So we will be moving our funding from Bank of America and never returning. Our research continues without harm because other banks that care about scientific freedom were able to step up."
KEEP PHOENIX NEW TIMES FREE... Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.