ECONOMY
US Eagle to exit cannabis banking as competition grows
The Aery Group, launched in 2019, will end operations on Nov. 1
U.S. Eagle Federal Credit Union says it is ending its cannabis banking arm, a move that comes as competition among financial services providers in the industry has grown.
The Albuquerque-based credit union, one of the state鈥檚 largest, announced the move on Thursday. U.S. Eagle officials said the closure of the Aery Group, launched in 2019, will take effect Nov. 1.
The Aery Group was one of the original financial institutions serving New Mexico鈥檚 cannabis industry when it was still only legal for medical use. The service allowed cannabis operators to have access to checking and savings accounts and deposit money at the credit union鈥檚 locations across the state.
In an interview, Michael Moore, president and CEO of U.S. Eagle, said servicing the cannabis industry is not 鈥減art of our long-term strategy.鈥� He said the consolidation of smaller operators 鈥� which Aery Group mostly served 鈥� and a proliferation of other financial institutions entering the cannabis banking ecosystem were factors that played into the decision.
鈥淚t鈥檚 difficult to grow now without going out of state or into other markets,鈥� Moore said.
Damien Padilla, an industry insider and owner of Cannabis Driven Management, a consulting firm, said at least 19 additional providers are now actively working with cannabis businesses in New Mexico 鈥� a far cry from the handful that were around before the adult-use market took off in 2022.
鈥淥nce people realized, 鈥楬ey, there鈥檚 other options out there,鈥� it kind of took away from their pie,鈥� Padilla said. 鈥淚t鈥檚 just one of those things that comes with every market.鈥�
The credit union鈥檚 exit comes roughly a year after its proposed acquisition of Southwest Capital Bank collapsed 鈥� a deal that would have paired two of the state鈥檚 leading cannabis banking operations.
That failed acquisition didn鈥檛 play a part in the closure of U.S. Eagle鈥檚 cannabis banking arm, according to Moore, who said that 鈥渋t wasn鈥檛 the biggest focus of the deal that we were after.鈥�
There have been some federal shifts on cannabis policy, including a push to reschedule cannabis. But those changes haven鈥檛 been enough to help some businesses, including financial institutions, navigate the complex federal regulations that remain.
Moore said U.S. Eagle could return to cannabis banking as the industry鈥檚 legal landscape evolves.
鈥淲e鈥檙e not trying to shut the door permanently at all,鈥� Moore said. 鈥淒efinitely not a no, but a time-will-tell approach.鈥�
Matthew Narvaiz is the Journal鈥檚 business editor. You can reach him at mnarvaiz@abqjournal.com.
