Since legalization, cannabis retailers and licensed producers have faced challenges securing financing from Canada’s major banking institutions. A group of cannabis legal advisors and consultants have decided to do something about it.
On February 10, 2023, Groupe SGF announced the launch of a class action lawsuit on behalf of Gabriel Bélanger (Founder of Origami Extraction Inc.) against the Desjardins Federation, National Bank, Royal Bank, Bank of Montreal, TD Bank, and CIBC. The lawsuit alleges that the named banks have engaged in financial discrimination against actors in the legal cannabis industry in Canada.
The main allegations include denials of opening bank accounts, sudden closures of bank accounts, and denials of access to various financial tools, including mortgage loans and credit lines for legal cannabis industry businesses.
Lead counsel on the case with Groupe SGF, Maxime Guérin, says “This has been an ongoing subject for the last few years, almost since legalization. A friend and client of mine came to me and said, ‘We need to do something, we need to act against the big banks.’ He had his bank account closed three times. I wanted to do something and fight this.”
Group SGF says, “The plaintiff wishes to have the harm suffered by all natural or legal persons (companies) who have suffered any kind of discrimination due to their involvement in the legal cannabis industry recognized.”
Make Banking More Accessible
When asked about the impact he hopes this lawsuit will have, Guérin says, “Our goal is to make things clearer and more accessible to the cannabis industry. We want a clearer position from banks, it is a matter of equity at this time.”
Guérin points out that legal cannabis businesses are often approved by a bank, only to have their account closed months later. “Everything was disclosed in the beginning and the bank director is aware of what’s happening,” he says. “But six months, 18 months, or two years later, they’re told they don’t fit the standards of the bank and the account is closed.”
If the lawsuit is successful, this could lead to more confidence in the industry and provide businesses with access to regular banking, better service, and ease the process for them. Guérin notes it could also improve access to payment solutions, as many are tied to banks and hesitant to work with the cannabis industry.
Cannabis businesses are encouraged to share their stories and what they have experienced with financial institutions on the Group SGF website.