The Medicinal Cannabis (R)evolution

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4.0 BANKING SECTOR ISSUES FOR THE CANNABIS INDUSTRY

While there may be tremendous financial and economic benefits associated with the introduction of medicinal cannabis, there are worrying implications to the financial sector which may inhibit the realisation of these benefits. This section discusses the significant role of the commercial banking sector in assisting the growth and sustainability of the medicinal cannabis industry. It also highlights the challenges that the ECCU member countries may face with correspondent banking relationships, the growing concern regarding money laundering risk and the opportunities which the medicinal cannabis industry may bring to the banking sector. 4.1 De-risking and the Eastern Caribbean Currency Union The importance of the financial system in facilitating commerce in any market is an established fact. It has been recognised that in order for member governments to realise the benefits of and create a viable medicinal cannabis industry, businesses engaged in the medicinal cannabis must have easy access to banking services. Medicinal cannabis businesses will require services to facilitate domestic, regional and international transactions. International trade for the most part in the ECCU is facilitated through the commercial banking sector. The majority of these transactions are transmitted through correspondent banking relationships. The Bank for International Settlements states that “Correspondent banking is an essential component of the global payment system, especially for cross-border transactions. Through correspondent banking relationships, banks can access financial services in different jurisdictions and provide cross-border payment services to their customers, supporting, inter alia, international trade and financial inclusion.”