Banking On The Marijuana Industry?

OREGON: It is legal to sell marijuana in 23 states. But pot businesses can’t deposit their money in banks because of federal banking laws. While the dilemma has been a back-burner issue in Congress for several years, a solution may be in the works.

A provision in the upcoming financial services spending bill would prevent the federal government from spending money on penalizing financial institutions that accept legal marijuana businesses as clients. That would greatly reduce the ability of federal agencies’ to prosecute the banks.

Increased access to banking would, in turn, decrease the currently cash-only businesses’ risk of robbery by allowing customers to pay with debit and credit cards, reduce the likelihood that the business could be used as a money-laundering front and solve the nightmare of trying to pay taxes with cash

“Forcing businessmen and businesswomen who are operating legally under Oregon state law to shuttle around gym bags full of cash is an invitation to crime and malfeasance,” said Sen. Jeff Merkley, D-Ore. “It’s time to let banks serve these legal businesses without fearing devastating reprisals from the federal government.”

State Seeks ‘Creative Ideas’ To Handle Cash From Alaska Pot Businesses

ALASKA: Struggling with the prospect of handling millions of dollars in cash from commercial marijuana businesses, Alaska’s Department of Revenue is holding three brainstorming sessions to get ideas for how to handle the influx of taxes in an industry shut off from basic banking practices.

 “It’s an uncharted territory. … We don’t have any precedent to go off of, really,” said Claire Lettow, regulations specialist for the state Tax Division.

Since marijuana remains illegal federally, Alaska’s financial institutions so far aren’t opening their doors to commercial businesses. That means, like other states that have legalized recreational marijuana, businesses will be dealing in cash. Potentially a lot of cash.

Alaska’s Department of Revenue estimates that it will take in between $5.1 million and $19.2 million in tax revenue from commercial marijuana in 2016.

Blue Line Protection Group Providing Financial, Security And Compliance To Legal Marijuana Industry

COLORADO:  Blue Line Protection Group, a leading provider of protection, financial and compliance services to the legal cannabis industry, was featured on the front page of The Denver Post on Sunday, June 15th in the article, “Reluctance of banks leaves pot shops looking for secure practices.”

The article focuses on the unique and uncertain banking issues facing legal marijuana dispensaries in Colorado. Traditional banks have not been willing to offer services to cannabis-related businesses due to the serious compliance issues they face, as it is illegal under federal law to manufacture, distribute or dispense marijuana.

The story highlights “Medicine Man,” a family-owned Denver marijuana business with designs on becoming a national brand that has employed Blue Line Protection Group’s security services since January 1st of this year. In addition to its armed guard security and compliance services, Blue Line is currently working with five Colorado marijuana companies to provide a viable financial solution for lawful cannabis dispensaries and has drawn interest from two Colorado-based banks.

The Denver Post article quoted Dan Sullivan, Blue Line Protection Group’s Vice President of Sales & Training and Andy Williams, Medicine Man’s President & CEO, describing how the two businesses are successfully working together.

Referring to Blue Line Protection Group, the article stated, “The company would serve as a compliance intermediary, an independent third party that would provide banks with data confirming that customers are 21 or older, licensing confirmation, monthly tax income, sales figures and other sensitive information.”

Mr. Sullivan commented, “The banks are saying they won’t do it because it’s an enormous amount of information they don’t possess. A third party, though, could do it for them. Blue Line would transport cash from businesses, store it in its own vault and then take it to a bank processing center.”

Andy Williams said the arrangement would give Medicine Man access to debit cards and checking and the terms were agreeable.

Sean Campbell, Blue Line’s Chief Executive Officer, commented on the article, “Blue Line has developed a proprietary standards and compliance verification program for banks interested in providing services to cannabis-related businesses. This makes Blue Line a natural fit to provide ongoing compliance services and reporting in this industry as we build upon our current suite of services to satisfy federal banking compliance requirements.”

Colorado OKs World’s 1st Pot Banking System

COLORADO: Gov. John Hickenlooper has signed legislation to try to establish the world’s first financial system for the largely cash-only marijuana industry.

The bill signed Friday morning seeks to form a network of uninsured cooperatives designed to give pot businesses a way to access basic banking services.

Banks that fear violating federal law do not allow marijuana businesses access to basic financial services. That has led to fears that the burgeoning marijuana industry can be a target for robberies.

Colorado became the first state to allow recreational pot sales on Jan. 1.

The legislation would allow pot businesses to pool money in cooperatives. However, that will only happen with the blessing of the U.S. Federal Reserve. That has prompted some to argue the legislation could be only symbolic.

Seattle Credit Union Moves Toward Serving Marijuana Growers

WASHINGTON: The Seattle-based nonprofit once known as Group Health Credit Union changed its name in 2010 to evoke a green, leafy, hardy plant seen as having medicinal properties.

No, not that one.

But four years later, what is now Salal Credit Union is gingerly stepping into a different field of green by doing business with growers of the cannabis plant.

In an apparent first for Western Washington that could ease fears that truckloads of cash will be a magnet for crime, Salal says openly that it expects to provide bank accounts for some state-licensed marijuana growers and processors.

The credit union plans a “beta test” with a couple of the businesses in the next few weeks, expanding soon to others in King, Snohomish and Pierce counties if all goes well, Salal CEO Russ Rosendal said.

Banks Get A Primer On Pot Money

DISTRICT OF COLUMBIA:  The Obama administration, taking the first regulatory step to accommodate the country’s growing state-approved marijuana businesses, issued guidelines Friday designed to bring dispensaries into the banking system and end their risky reliance on stashing large amounts of cash.

The step was a cautious one, reflecting conflicting pressures on the administration.

On one side, many states now allow the sale of marijuana for medical or recreational use. Atty. Gen. Eric H. Holder Jr. said last month that law enforcement agencies were increasingly concerned about marijuana sellers who are forced to deal in cash because the banks’ unwillingness to deal with them prevents them from using credit cards. [Read more…]

Banking Marijuana Requires “Act Of Congress”

DISTRICT OF COLUMBIA:  Despite bankers’ varied attitudes about legalizing marijuana, now that it is legal in Colorado, banks are supportive of government efforts to permit financial services for marijuana businesses. However, numerous obstacles prevent banks from serving marijuana businesses and their customers as they conduct legal activities.

Colorado can’t regulate or tax an industry for which it cannot track money. Public safety risks associated with cash-heavy businesses cause concern. And several federal laws preclude banks from serving these businesses, regardless of state law. Only Congress can resolve this. [Read more…]

Banking Marijuana Requires “Act Of Congress”

DISTRICT OF COLUMBIA:  Despite bankers’ varied attitudes about legalizing marijuana, now that it is legal in Colorado, banks are supportive of government efforts to permit financial services for marijuana businesses. However, numerous obstacles prevent banks from serving marijuana businesses and their customers as they conduct legal activities.

Colorado can’t regulate or tax an industry for which it cannot track money. Public safety risks associated with cash-heavy businesses cause concern. And several federal laws preclude banks from serving these businesses, regardless of state law. Only Congress can resolve this. [Read more…]

Attorney General Holder: Feds To Let Banks Handle Pot Money

DISTRICT OF COLUMBIA:  The Obama administration will soon announce regulations that allow banks to do business with legal marijuana sellers, Attorney General Eric Holder said Thursday.

“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Holder said during an appearance at the University of Virginia’s Miller Center. “There’s a public safety component to this. Huge amounts of cash—substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited is something that would worry me, just from a law enforcement perspective.” [Read more…]

Attorney General Holder: Feds To Let Banks Handle Pot Money

DISTRICT OF COLUMBIA:  The Obama administration will soon announce regulations that allow banks to do business with legal marijuana sellers, Attorney General Eric Holder said Thursday.

“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Holder said during an appearance at the University of Virginia’s Miller Center. “There’s a public safety component to this. Huge amounts of cash—substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited is something that would worry me, just from a law enforcement perspective.” [Read more…]