Colorado OKs Marijuana Credit Union

COLORADO:  Colorado’s marijuana businesses have a cash flow problem: Too much cash is flowing in and they’ve nowhere to put it.

Most banks refuse to work with marijuana businesses, which are legal in Colorado but remain illegal at the federal level. Now, a new credit union aimed specifically toward the cannabis industry hopes to offer a solution.

The Fourth Corner Credit Union hopes to open its doors within weeks in Denver, offering to accept cash deposits and to permit members to make electronic transfers for payroll and rent, and to buy supplies.

“We are on the one-yard line,” said Mark Mason, an attorney advising the credit union’s nine founders.

 

Colorado Pot Credit Union Could Be Open By Jan. 1 Under State Charter

COLORADO:  The world’s first financial institution established specifically for the marijuana industry could be open in Colorado by Jan. 1.

The Colorado Division of Financial Services late Wednesday issued Fourth Corner Credit Union an unconditional charter to operate, the first state credit-union charter issued in nearly a decade.

The next hurdles will be obtaining insurance from the National Credit Union Administration, the federal regulator of credit unions, and getting a master account from the Federal Reserve System.

Gov. John Hickenlooper‘s office called the charter “the end of the line” for the state’s efforts to solve the marijuana industry’s nagging problem: obtaining banking services.

Although the NCUA insurance is not guaranteed — sale and consumption of marijuana remain illegal under federal law — Fourth Corner can operate until NCUA makes its decision.

 

CCSE Hosts Banking, Taxes & 280E Industry Panel On July 24th

WASHINGTON: Federal tax code 280E is the single largest hurdle for any entrepreneur attempting to create a sustainable Cannabis business. Although the sale of marijuana is legal in several states, it remains illegal under federal law, and Revenue Code 280E bans most deductions and tax credits given to businesses selling Schedule I and II controlled substances, which includes marijuana.Under current tax law, Section 280E allows marijuana businesses to deduct only their cost of goods sold  all other normal and ordinary business expenses are rejected by the IRS, including marketing, training, transportation, etc. So where does this leave you, as a legitimate business owner? Is it possible to succeed under these restrictions? The answer is yes, but it requires education and creativity.

The Coalition for Cannabis Standards and Ethics (CCSE), a 501(c)(6) nonprofit, will be hosting a panel discussion on financial issues affecting the Washington cannabis industry on Thursday, July 24th from 5:30pm – 7:30pm, followed by a one-hour mixer.  The panel will be held at the Armory Loft #3, inside the Center House at the Seattle Center.The panel includes some of the brightest minds tackling the 280E issue today in order to help you succeed and gain the knowledge required to overcome this daunting obstacle in the Cannabis industry. The discussion will focus on 280e and inventory accounting, best practices for managing the finances of a cannabis business, as well as access to banking. It will be sure to be a very interesting and lively discussion!Members of the panel include:

Dean Guske, CPA

Dean has over 26 years experience in the areas of taxation, accounting, and business consultation.  In addition, he has become the leading expert in Washington state regarding the proper filing of tax returns for the cannabis industry.  He regularly speaks to CPAs and industry leaders regarding IRC 280e and its impact on federal tax returns.

John Davis
John is the CEO of Northwest Patient Resource Center, serves as the Executive Director of the CCSE, and is also on the Board of Directors of both Seattle Hempfest and the National Cannabis Industry Association.  John is a longtime entrepreneur and drug policy activist.

Carmella Houston
Carmella is the Vice President of Business Services at Salal Credit Union, which is currently beta testing with licensed I-502 businesses in Western Washington.  Carmella started the Business Banking division at Salal CU three years ago.  Carmella has more than 20 years of banking experience including: regulatory oversight, commercial real estate lending, construction and business lending.

Todd Arkley, CPA (moderator)
Todd started Arkley Accounting Group in order to focus on small businesses and the cannabis industry.  He has over 13 years experience in private industry, in roles ranging from controller to CFO.  His current clients include both medical and 502-licensed businesses, as well as ancillary businesses supporting the cannabis industry.  Todd currently serves as Treasurer on the CCSE Board of Directors.

Colorado’s New Pot Banking Law Won’t Solve Cash Problems

COLORADO: Colorado Gov. John Hickenlooper signed a bill Friday designed to create the world’s first state-level banking system for legal cannabis companies, which have complained that their lack of access to basic banking services creates difficult and dangerous risks.

But the financial industry quickly cast doubt on whether the legislation will address issues faced by marijuana businesses in the state, where recreational pot became legal this year. Asked what it would accomplish, Colorado Bankers Association CEO Don Childears said: “Basically, absolutely nothing.”

“We don’t think it can be effective, and it can never get off the ground,” he said.

The bill allows legal marijuana shops to create a makeshift financial network that would help them gain access to credit and merchant services.

Colorado House Backs Down, OKs Hemp-Farmers’ Access To Financial Co-Op System

COLORADO: Backing down from a five-hour fight over whether industrial hemp farmers should be able to access a new credit union-like arrangement for marijuana businesses, the state House narrowly passed a bill that would create the first cooperative of its kind.

Acquiescing to Senate insistence that hemp farmers be allowed to join the cooperatives, representatives voted 33-31 for House Bill 1398, sending it to Gov. John Hickenlooper‘s desk for approval and, ultimately, a showdown with federal banking regulators.

The cooperative setup requires approval by the U.S. Federal Reserve, which regulates the nation’s banking system.

The vote was the ultimate compromise for legislators who wanted to keep the cooperatives limited to marijuana businesses.

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.

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.”

Washington Marijuana Entrepreneurs Fear Potentially Violent Consequences Of An All-Cash Industry

WASHINGTON: Brian Stroh is not taking any chances.

Aware of the inherent risks associated with his line of work, Stroh pays monthly for armed security guards to assist him in guarded revenue transport and facility supervision. He’s planning to use lockboxes and a variety other methods to store his money, which he will keep away from his home and place of employment. And while he’s taking major precautions, he’s even more worried about the people buying his product.

His business: marijuana production and processing, one of Washington’s first to be licensed since the state legalized cannabis for recreational use.

His worry: the continued federal prohibition of marijuana, which prevents banks from offering any legal financial services to state-licensed cannabis businesses.

Congress Yawns At Colorado Delegation’s Marijuana Banking Bill

DISTRICT OF COLUMBIA: As cannabis workers carry cash by the briefcase throughout Colorado, the lack of interest in Washington suggests that a bill to green-light banking practices for the marijuana industry is headed nowhere fast.

Federal legislation that could end cash-only practices in the marijuana industry will likely remain stuck in committee this year, with near silence from Washington lawmakers as to why it has.

A Denver Post survey of the two House committees that could take immediate action found only one member outside the bill’s signed supporters and the Colorado delegation had interest in discussing the subject.

Shunned By Banks, Colorado Pot Retailers Beef Up Security To Protect Cash

COLORADO:  In Colorado, sales of recreational pot have been legal for nearly two months, but federal law still brings a major obstacle: Banks won’t take the money. Marijuana retailers are going to great lengths to keep their cash safe.

As marijuana green makes a lot of that other green, it can be both good news and bad news for business owners.

At the pot store called The Health Center, director of operations Tiffany Goldman is nervous. “Security is probably the most important thing that we have to think about in this industry,” Goldman said.

So armed guards transport plants, check IDs and, most importantly, keep an eye on the money.