02/10/2024
What Is CIBC’s Role In LEGAL Cannabis?
I have been a CIBC customer for over 20 years. I also worked at CIBC for over 13 years. Naturally, when I started Elevated Cannabis over three years ago I chose CIBC for business banking.
Since starting Elevated Cannabis, CIBC has only offered an account with deposit-only features for my business, despite my business revenue positive. No credit… (although I pay banking fees). I was told that it is the nature of my business (cannabis) that is restricting CIBC from extending credit products (citing adverse exposure to the US where cannabis is not federally legal). This means that I can only deal in cash transactions.
During the startup phase of my business, I approached CIBC for a business loan. I was not offered a loan, instead, CIBC recommended and sent me to a (CIBC-approved) predatory third-party lender (18% interest - prime at the time was around 3%) as a means to obtain credit. This is despite having an 800+ credit score and equity in my home (that was more than the requested loan).
Here is the kicker, the OCS (Ontario Cannabis Store), the entity (the only entity) that all cannabis dispensaries MUST buy their cannabis supplies from, which sells cannabis online (in direct competition with the dispensaries they supply), and which requires payment as soon as cannabis is shipped to the dispensaries, and which is one of the only (if not the only) truly profitable cannabis companies (cash balances of $385Million), banks with CIBC.
Can anyone with insight help make sense of this for me, as no one (that I have spoken with) at CIBC can?
Perhaps the solution is that the OCS uses some of its cash to establish credit products at CIBC for dispensaries.
