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Providing Banking Services to the Cannabis Industry: Challenges and Consequences

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Parke Bancorp Reports Significant Losses due to Theft

Parke Bancorp, a prominent banking institution based in Washington Township, New Jersey, that primarily operates in the Southern New Jersey and Philadelphia area, has encountered a major setback in its pursuit of serving the cannabis industry. Earlier this year, the bank fell victim to a $9.5 million theft involving its armored car partner responsible for transporting and storing cash for cannabis-related clients.

Upon discovering this unfortunate incident, Parke Bancorp promptly enlisted the services of an external accounting firm to validate the theft. Subsequently, the bank had to record the loss during the third quarter, resulting in a staggering 90% decrease in profits, down to $1 million or 8 cents per share. This disappointing financial outcome was announced by the bank on Wednesday.

Recovery Efforts and Financial Resilience

Despite the substantial blow suffered, Parke Bancorp remains resolute in its commitment to mitigate the impact of this incident. The bank has expressed its intention to pursue compensatory measures, including filing insurance claims to regain the losses incurred. Vita Pantilione, the CEO of Parke Bancorp, stated, “Although this theft is painful and was unexpected, we are fortunate to possess the necessary financial strength and earnings to absorb this loss.”

Elusive Federal Legislation

For over a decade, the progress towards enacting federal legislation that would allow legal cannabis companies access to the financial system has been slow and arduous. However, recent developments have reignited hope for positive change. Last month, the Senate Banking Committee took a significant step forward by approving the Secure and Fair Enforcement Regulation Banking Act. This sets the stage for potential Senate-wide voting on this legislation.

In conclusion, Parke Bancorp’s recent ordeal serves as a stark reminder of the continuous challenges faced by financial institutions seeking to serve the cannabis industry. As the industry continues to expand, both in legal capacity and overall economic significance, it remains imperative to address the obstacles preventing a seamless integration into the banking sector.

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