With dispensaries bringing in as much green as they ship out, it may come as a surprise that banks aren’t ready to cash in on the booming industry.
One of the problems posed by continual federal restrictions is that banks operating across the nation aren’t willing to risk lawsuits by accepting money earned from a technically illegal activity.
That means marijuana businesses usually find themselves with more cash than they can keep onsite, and without the services of a bank, that leads to less-secure storage methods offsite with around-the-clock security.
While some banks are willing to take the risk, most dispensaries come up with creative alternatives. A farm in California even reported burying their funds in safes around the property—not the most efficient or secure method, but hey, it worked for pirates, right?
In 2015, a Marijuana Business Daily survey of 400 marijuana businesses found 70 percent didn’t have bank accounts. Nearly 50 percent of marijuana support businesses—those in the industry that don’t deal with the plant directly—don’t use banks either.
Marijuana businesses are therefore forced to pay for expenses like wages, taxes and advertisements in cash, which means carrying around sometimes thousands of dollars.
As marijuana sales grow, this creates problems not only in security, but in lost benefits of having the $6.7 billion industry part of the banking system to use those funds in banking services. While the industry is legal, we have yet to utilize the full potential of legalizing the business, retaining some of the drawbacks of the black market.
Technically, banks aren’t legally prohibited from providing services to marijuana businesses. Alongside the Obama-era Cole Memo, which allows marijuana businesses to operate within the guidelines of their respective states, another memo allowed banks to partner with those businesses.
The guidelines for banks fell under the Financial Crimes Enforcement Network, which keeps track of illegal banking practices like money laundering—not the friendliest set of rules to encourage banks to work with the marijuana industry.
Banks are required to file special reports based on their activity with marijuana businesses, even if there’s no suspicious activity, leading to a certain amount of austerity in forming partnerships in the marijuana industry.
It’s time for this unfair and restrictive policy to change, and some members of Congress agree.
Senators from Colorado, Washington and Alaska—all states in which recreational marijuana in legal—have introduced legislation to allow banks to work with marijuana business without fear of persecution.
Reps. Ed Perlmutter (D-Colorado) Danny Heck (D-Washington) and Don Young (R-Alaska) co-sponsored the Secure and Fair Enforcement Banking Act. The bill is a revision of similar bills introduced in 2013 and 2015, both of which failed.
With a broader industry and acceptance of marijuana, perhaps the bill has a chance of finally bringing the marijuana industry into the banking fold and fully utilizing the benefits of what is becoming a massive nationwide industry.
It’s time to treat marijuana like any other business and let them bank.
This article appears in Jul 6-12, 2017.
Very well written explanation of the prejudices and exploitation to self determination. Thanks, Nick Meyers;
I see where the federal government is allowing those with quantified medical need benefits to continue and embrace.
I recently witnessed a elderly person just reaching 62 by necessity of hard labor for over 40 years paid into SS all those years. The SS office gave retirement but ask him to apply for Disability. When the review of medical records and a interview it was awarded within months. This is what the program was for in the first place.
This is the issue when apply for disability was revealed as compounded Cannabis use primarily for spastic nerve response from injuries as well as pain associated with quick muscle jerks.
So with keeping the cannabis on the schedule 1 this person live in a limbo! A total fear now that disability can be cut off with just a quick administrative pen. Carrying cash in a electronic transfer world.
This citizen that has contributed for over 40 years to the community has no legal redress for wrongs. The supreme court of AZ ruled that that the Cannabis is on the federal schedule 1 list you can not be personally legally counseled on how to obtain cannabis. So am I to understand that a business can get counsel on what the court ruled illegal?
So now this citizen as thousands in just Tucson alone are left without the federal protections promised to every citizen.
1- ability to redress issues in a court
2-safe reliable product controls by the FDA
3- protection of seizure of property stop benefits is that
4-safe reliable electronics transfers
5-ability to register regiments treatments therapies
6- lock out of interstate commerce
7-protects that medications & therapies that have been proven are solid and cant be just quickly changed in a closed committee we need an constitutional amendment correcting wrongs. like the 21’st did of the prohibition we need security. The beast has grown bigger than the problem. The DEA has implemented the Volstead in parts this agency need to be blended into HLS it is rouge it is dark it is wrong in so many way the rights dont equal.
Give these seniors and all other security so not to live in fear is that not the first order of government ?
Incidentally the 6.5 billion industry is a cash influx through residual vessel that are tax collected is close to triple.
And my bet is Ducey is holding out on legalization to have a heavy burden to pay the retirement of police and fire which is in BAD shape. And one big apple is the agricultural licensing of hemp with heavy license and administrative fees paid into an account of labor for past wrongs. Just think off schedule 1 all this to leverage goes away for so many to siphon off the flow.
For all of the one world order tye dyed, hair farming, Birkenstock wearing, face pierced body illustrated community that so many embrace here. As well as taking the position that they represent the LBGT community with progressive ideals of a utopia and nirvana.
Grow a layer of skin for gods sake. Trump is in the drives set trying to take him out is ridiculous as is much of your positions. We have a common ground to give all some freedoms. We have a collective force to allow Marijuana into our culture that has been here since time. It is called a constitutional amendment.
McSally is venerable needs support her base is to narrow.Her understanding impact in congress is important look at her committees and ongoing work in committee assignments is impressive. ASK FOR ENDORSEMENT OF AN AMENDMENT TO REPEAL SCHEDULE 1
Ask Raul but he always has his hand out to siphon that is why he would not support off schedule 1 no room to siphon.
Crypto Gaming over Renewable energy is better than your local bank