Banks vs. the cannabis industry is an unfortunate yet common battle amid the green rush. America’s federal laws regarding cannabis growers and cannabis operators commonly need to find loopholes in the tax code since financial institutes constantly refuse them service.
Canada shared similar laws before the federal legalization that allowed businesses to sell pre-rolled blunts, among other cannabis products, in fall 2018. Despite having a federal license, Scotiabanks rescinded one grower’s mortgage over cannabis use in 2010. The Canadian Human Rights Commission rejected several attempts to appeal the decision in the past decade.
According to the Western Standard, Val Therese, ON resident Robert McIlvenna’s dispute with Scotiabank is now making its way to The Canadian Human Rights Tribunal. The bank informed the homeowner in 2010 that they do not “allow marijuana in their communities,” adding their concern “about the environmental issues within residences where cannabis was grown.” More bluntly, Scotiabank stated, “growing marijuana at a mortgaged home was prohibited by bank policy.”
The homeowner did have a federal license to grow cannabis. This weight of this case highlights a more significant issue than the sole licensee’s mortgage in front of the Canadian Human Rights Tribunal. Edward Lustig, an adjudicator with the Tribunal, accused the bank of violating the Canadian Human Rights Act with a ” discriminatory practice” through its treatment of homeowners. He said they displayed “an adverse differential manner in the provision of services customarily available to the general public.”
“The key question in this motion is who, on the facts and pursuant to the law, is a victim of discrimination,” Lustig wrote.
Scotiabank has, once again, attempted to file for a dismissal, which previously worked in their favor. The Canadian Human Rights Commission rejected McIlvenna’s complaint on two separate occasions. Three other complaints were filed to a federal judge over the years, as well. However, Federal Court Justice Robert Barnes addressed the filing in a court document.
“For reasons that have not been expressed, it is apparent the Human Rights Commission does not like this complaint and wants to be rid of it,” Justice Robert Barnes wrote in 2019. “In my view, the Commission has shown itself to be unfit to resolve this matter such that the court must now direct it to act.”
Scotiabank recalled McIlvenna’s mortgage after discovering that he was growing cannabis plants on the property before cutting him off from further credit. The Tribunal hearing will finally address McIlvenna’s complaint against the financial institution and its practices towards legal cultivators.
Still, Scotiabank isn’t budging from its stance. While previously describing the home as a “grow op,” they never provided evidence to back the claim. One bank manager explained that they did not agree to finance a property used to grow marijuana unless it was “completely remediated,” emphasizing that it’s “very clear in the policy.”
“We wouldn’t be able to provide further financing. (There are) no additional funds based on the appraiser saying what it was used for, growing marijuana,” A Scotiabank manager told a commission investigator.
The tension between banks and cannabis operators in Canada remained stagnant beyond the 2018 legalization. According to the CBC, 50 out of the 52 members of The Association of Canadian Cannabis Retailers in British Colombia still aren’t allowed access to traditional banks. Many of them have relied on credit unions, which doesn’t even account for acquiring loans or credit cards. The national media outlet reported that 52% of cannabis operators across Canada face similar hurdles in the legal market. The banks’ rules are partially due to their international presence in other countries with conservative views of cannabis. Royal Bank of Canada and CIBC stated that they review business relationships and opportunities on a “case-by-case basis.”