Monday, July 15, 2024

Marijuana referendum postponement may extend due to banking concerns


The postponement of the marijuana referendum on whether to legalize the production and sale of this drug may take a bit longer due to the threat of losing affiliated financial institutions in the United States of America (USA). The banking sector in Belize may present a roadblock to the Cannabis and Industrial Hemp Control and Licensing Bill 2022, which has already been passed in the National Assembly.
The Government of Belize maintains that the reason for pausing the referendum is the $5 million cost to execute the process. However, it also confirmed the concerns raised by the banking community in the country. Minister of Home Affairs and New Growth Industries Honourable Kareem Musa told reporters that cannabis legalization is taking place across the Caribbean, and correspondent banking has always been a concern. “As you recall, with the offshore sector, we had to make certain regulations and adjustments to comply with the European Union so that we were not blacklisted. So, correspondent banking is always a live issue for Belize and the Caribbean, but what I can tell you is that countries like Jamaica and Antigua are moving towards it, Trinidad is about to pass their legislation, and St. Vincent those countries are moving towards the legalization of cannabis,” Musa said. The minister said that the cannabis industry is a cash one, and according to him, banking does not come into the picture unless someone is banking the cannabis money.
Musa offered the example that in countries like the USA, where it brings about $92 billion in revenues, it is a cash industry. He explained that people in this industry do not deposit their money in the bank. “So, like I keep saying, that is how we would have to operate in Belize if we were to legalize cannabis,” said Musa.
In 2015, the Belize banking sector took a hit following a ‘de-risking’ strategy forced on the USA banking industry by federal regulators. This caused two of the largest banks in Belize, Belize Bank, and Atlantic Bank, to lose correspondence with the Bank of America, the premier multinational banking and financial service provider. The loss left Belize-based banks searching for alternate arrangements to continue providing offshore banking to their customers. The issue was eventually addressed, but not before creating a chaotic situation for the Belizean economy.

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