As the third anniversary of Canada's legalization of cannabis approaches, retailers say they continue to struggle to find access to basic financial services from banks.

Industry experts say decades of stigma, as well as international pressure, continue to plague the fledgling industry, forcing shop owners to dig into their savings to open their small businesses and limiting the sector's growth.

Charles Varabioff, owner of Kingsway Cannabis, says finding a bank to take on his business account was next to impossible.

"I tried every single one of them. And every one [of the banks] was 'no, no, no, no, no,'" he said.

Branch managers, he says, would tell him the cannabis industry is too high-risk.

"High-risk? It's no more high-risk than a casino, a bar, or a restaurant," said Varabioff, who also owns a shop in Grand Forks, B.C. 

"We're legal, licensed, regulated by the city and the government. Canadian banking needs to get on board with this industry."

Most cannabis retailers unable to get chequing accounts

The Association of Canadian Cannabis Retailers (ACCRES) says 50 of its 52 members in B.C. have been denied access at traditional banks, and have turned to local credit unions instead. 

"We're not even talking about loans or credit cards," said Jaclynn Pehota, executive director of ACCRES.

"We're talking about very basic financial services like a chequing account. My members are still struggling, three years post-cannabis legalization in Canada."

She says only two of her members were able to access banking services with a traditional bank and that was due to their longstanding business relationships with the bank while operating in other industries.

"Even those folks were shocked by the treatment they received when they went into those institutions. Having a conversation about a company that has the same director, same makeup, it's a legal product, same regulatory framework, and when they come in with a cannabis business the bank goes 'whoa, whoa, whoa,'" she said.

Across B.C., there are 400 legal cannabis retailers. Pehota believes there would be more if cannabis retailers could access financial support from banking institutions.

Cannabis hesitancy

Many of Canada's national banks also operate internationally. And although the retail of cannabis is legal in Canada, it's still illegal in many other countries.

Pehota believes the stigma of the industry, especially as it's viewed by international markets, has forced many Canadian banks to steer clear of the sector.

"Banks with American exposure specifically are very challenged by this particular file," she said. 

"I think we can't underestimate the impact of the stigma. We're talking about 80 years of prohibitionist rhetoric that has been very prominent in society."

Some states have legalized the recreational use of cannabis, but most have not. 

As well, she says Canada is quite progressive in how it views the cannabis industry, yet many international markets see it through a far more conservative lens.

Mike Schilling, president and CEO of Community Savings, agrees. His credit union represents more than 50 cannabis retailers in B.C.

"The banks are afraid of the extraterritorial reach of U.S. laws and this makes it more difficult for them," he said.

The cannabis retail sector is a fledgling industry with high regulatory oversight. Schilling believes traditional banks might see it as more work than it's worth.

"There's a lot of checks and balances we need to do. And I think the banks have made an economic decision that there is no big profit in this."

He admits the shadow of prohibition still looms large over the industry, though he says much of the fear is misplaced because the industry is largely populated by small business owners who are providing a service their community wants.

"If you wanted to launder money, which is probably the key concern, you could do that through a florist or a bakery. The last place I would do it is through a cannabis retailer because that's what everybody's looking at," said Schilling.

Untapped potential of the sector

Cannabis retailers are being frozen out by banks, says Pehota, adding that it's putting an undue burden on the new industry and the small business owners who operate within it.

She says owners are having to reach deep into their savings because they can't secure credit cards or small business loans to help launch their storefronts from either banks or credit unions.

Varabioff says he has sunk more than $250,000 in personal savings into the opening of Kingsway Cannabis.

As well, it creates challenges for retailers when they want to expand their brand outside of the province. Credit unions are often local to a province or even a specific community. Pehota says it can create logistical difficulties when an institution doesn't have a national presence.

Overall, she says the hesitancy of national banking institutions is shortsighted, adding they're failing to see the potential economic opportunity created by legalization.

"It is B.C.'s sector to own. It has incredible potential to lift up all British Columbians and it's a real shame to me that we haven't seen banks recognize that fact and support this sector," she said.