COLORADO: On Sunday night, ’60 Minutes’ revisited a story it had previously aired on the state of Colorado’s legalized marijuana industry, going back to the state in order to get an update. The story gave a great broad overview of the industry, but by trying to cover so many parts of this business, many things were missed.
The ’60 Minutes’ piece, called ‘Colorado Pot,’ noted that it isn’t easy to make money in legalized marijuana, but then like most of these general stories, zoomed in on the giant safe full of cash. The public assumes that because these businesses are awash in cash that they are profitable. That isn’t necessarily the case. The story did touch on the seed-to-sale software, but didn’t note that for the huge warehouse full of plants featured in the story, the software company could be charging anywhere from $0.25 to $0.45 an RFID or bar-code. These bar-codes can’t be reused and a big warehouse like the one on the show that is growing thousands of plants is spending thousands for inventory tracking.
The show was accurate in describing the difficulty these business owners face in finding a bank. Most of the major banks will not service these customers and some of the state chartered banks that were stepping in are now pulling back. First, they are concerned about the new Attorney General Loretta Lynch who is not for legalization. Secondly, it’s expensive for the banks to handle these customers. The amount of employees required to fill out all the paperwork to keep the banks in compliance make these money losing customers. The banks have to fill out SARS paperwork or Suspicious Activity Reports on the accounts. This takes people and time and while these businesses may be swimming in cash, it doesn’t pay off for the smaller banks. The big banks have said they won’t allow this type of banking until marijuana is no longer illegal at the Federal level.