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Starts and stops



Despite the hopes of a desperate industry, a bill designed to ease the banking woes of medical-marijuana-center owners died in the state Legislature on Valentine's Day, shortly after its birth.

Offered by Denver Sen. Pat Steadman, the Medical Marijuana Financial Cooperatives Act would have, like you imagine, created a cooperative where people could safely deposit their cash. Few such safe places have existed since some of the last banks that would openly accept center accounts started closing those accounts last summer.

Of course, the veteran lawmaker was ambivalent about the bill's success from the very beginning.

"I went back and forth thinking that we had a solution, and realizing I was running into a brick wall," says Steadman, "and I was just attracting attention to the problem."

Besides opposition from banking lobbyists and the law enforcement community, one drawback to the cooperative was that the deposited money couldn't have been withdrawn or transferred without involving the federal banking system, says State Commissioner of Financial Services Chris R. Myklebust.

"The system that we have isn't broken," he says, "but the federal government is cracking down on any institution wanting to provide those services [for dispensaries]."

Really, it's the threat of a crackdown that's keeping the banks away. The U.S. Department of Justice has applied the Bank Secrecy Act, designed for fighting terrorism and international drug cartels, to medical marijuana dispensaries. "Those who engage in transactions involving the proceeds of such activity may also be in violation of federal money laundering statutes and other federal financial laws," states a June 2011 DOJ memo.

That memo caused several Colorado banks that had medical marijuana dispensary accounts, including Colorado Springs State Bank, to ask their clients to leave, says Jenifer Waller, senior vice president with the Colorado Bankers Association.

Bigger government

The next hope to resolve the conundrum is a piece of legislation sitting in Washington, D.C., cosponsored by Boulder Rep. Jared Polis and nine other representatives. Called the Small Business Banking Improvement Act of 2011, it would allow banks and credit unions in states that certify dispensaries to avoid reporting dispensaries to federal law enforcement under the Bank Secrecy Act.

Only problem is that the bill's been tied up in committee since May of last year. "It's a bill that we hope will move," says Chris Fitzgerald, Polis' communication director. "And if we return after the fall [congressional election], it will be reintroduced."

Denver-based Cannabis Business Alliance supports the bill, says executive director Shawn Coleman. "At the end of the day," he says, "this is about small business owners trying to make payroll for their employees."

It's also about crime. Since cash is king, Steadman says, he's concerned that dispensaries become even greater targets for robberies and burglaries. He also fears such crimes are going unreported because dispensaries don't want to bring attention to themselves.

"I want this industry to succeed and serve patients, and prove that there's a way to have a well-run, safe marijuana industry in our state," he says.

Mattress savings

Asking dispensaries what they're currently doing is worse than asking for a secret recipe. Owners have devised ways to stay open, but none are about to share theirs with the media. If their bank chose to keep their business, they don't want to bring attention to it; if they're running cash-only, that's all the more reason to keep quiet.

"It's haphazard at best," agrees Tanya Garduno, owner of Amendment 20 dispensary and president of the Colorado Springs Medical Cannabis Council. "There's no one way to [consistently] get things done."

For example, even if they can pay utility bills and such with cash, they, like all businesses, must pay state payroll taxes by electronic transfer.

Either way, Garduno speaks monthly with people from around the state who share ideas and look at possibilities. They're considering looking at banks on American Indian reservations, and some dispensaries have been able to open brokerage accounts through non-FDIC-insured institutions. A dispensary credit union would be ideal, she says, because specialists would better understand the rules and regulations for being transparent.

"We can be professional on every other level but that one," Garduno says.


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