Money Laundering Concerns Prompt Ohio Banks To Weigh In On Legal Pot

OHIO: The board of the Ohio Bankers League voted to oppose legalizing marijuana, citing concerns about money laundering.

Ohio voters will decide Nov. 3 whether to approve Issue 3, which would legalize marijuana for personal and medical use.

The proposed constitutional amendment was drafted by ResponsibleOhio, a political action committee. Issue 3 would permit 10 marijuana farms. Each would be owned by one of 10 investment groups, which contributed $2 million apiece to fund the PAC’s $20 million campaign to legalize pot. Investors include prominent Cincinnatians such as Frank Wood, CEO of the venture capital firm Secret Works.

Chase Closes Accounts Of Pot Entrepreneur Martin Tobias

WASHINGTON: After more than 20 years of banking with JPMorgan Chase, former Microsoft executive and marijuana entrepreneur Martin Tobias saw his business and personal accounts terminated this week.

Chase spokeswoman Patricia Wexler confirmed that both of Tobias’s accounts have been shut down, but as policy she would not give more details about his case.

“We are closely following federal guidance on this matter,” she said, explaining that the bank doesn’t work with marijuana businesses. “If we find out that someone is in the business after they have already been banking with us, then we take steps to close that account.”

Oregon’s MBank Now Nixing All Pot Accounts After Colorado Plan Fizzled

OREGON: Just two months after Oregon-based MBank pulled back on a promise to work with the marijuana industry in Colorado, the $170-million institution said it is dropping its cannabis clients entirely.

CEO Jef Baker said MBank doesn’t have the “resources necessary to manage the compliance” requirements for banks maintaining accounts with legal marijuana businesses.

But others familiar with the bank’s situation said the move from the marijuana space was forced by regulators who recently audited bank records over an extended period, eventually downgrading the institution’s rating and indicating marijuana deposits might be too risky to handle.

The bank has been under scrutiny because of a prior consent agreement with federal regulators that was the result of financial problems it had a few years ago. But now, regulatory examinations that normally were taking about two weeks suddenly were taking six, according to people familiar with that process.

Marijuana Banking: Secretive But Poised To Grow

WASHINGTON: Many marijuana business owners say they have bank accounts, but aren’t completely forthright with their bankers about the nature of their businesses. They claim to be in “consulting” or “medical research.”  And they know they could lose those bank accounts suddenly, at any time, since federal law prohibits banks from holding any funds associated with illegal drugs.

Now in the wake of Initiative 502, which legalized marijuana in Washington state, some banks and credit unions may be ready to officially open accounts for marijuana businesses. Numerica, a Spokane Valley-based credit union, has announced it will accept state-licensed businesses as clients.

Seattle attorney Robert McVay with the Canna Law Group said there are more to come.

“Small banks, especially the community banks, are certainly looking into it if only because it’s a new industry and whoever takes that first plunge, whoever takes the risk, is going to get lots and lots and lots of business,” McVay said. “We’re working with a couple financial institutions here in the state that are likely going to do this.”

Your Money Stinks

COLORADO:  A Few years ago, a Boulder woman who owned one of Colorado’s first dispensaries ran into some troubles with her bank. As she later recounted, the bank told her the money she was depositing into her business account reeked of marijuana.

The bank was willing to take her money, but she would have to do something about the smell. Maybe Febreze would help. Her bank, in other words, asked her to literally launder her money.

Since then, the relationship between marijuana businesses and their banks has only become more fraught and complicated. Talk to anyone involved in Colorado’s marijuana industry—regulators, market players, law enforcement—and they’ll likely agree that the biggest obstacle to bringing marijuana out of the shadows is the industry’s inability to obtain basic banking services.

Legal Marijuana Businesses Should Have Access to Banks, Holder Says

DISTRICT OF COLUMBIA:  Attorney General Eric H. Holder Jr. said Thursday that lawful marijuana businesses should have access to the American banking system and that the government would soon offer rules to help them gain it. The rules are not expected to give banks a green light to accept deposits and provide other services, but would tell prosecutors not to prioritize cases involving legal marijuana businesses that use banks.

“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Mr. Holder said at the Miller Center at the University of Virginia. “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…]

Legal Marijuana Businesses Should Have Access to Banks, Holder Says

DISTRICT OF COLUMBIA:  Attorney General Eric H. Holder Jr. said Thursday that lawful marijuana businesses should have access to the American banking system and that the government would soon offer rules to help them gain it. The rules are not expected to give banks a green light to accept deposits and provide other services, but would tell prosecutors not to prioritize cases involving legal marijuana businesses that use banks.

“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Mr. Holder said at the Miller Center at the University of Virginia. “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…]