Marijuana farmers — clad in plaid shirts and jeans, and looking like, well, farmers — openly assembled for a meeting of the
Convening in the ballroom, CGA members shared stories about the problems they've had finding banks, credit unions or other institutions willing to take marijuana dollars, make loans to businesses and elevate the legal pot economy from a virtual cash-only industry to one with full access to the financial system.
“There was a problem with people … having accounts closed,” said
Though federally prohibited, marijuana is now legal in some form in 28 states and
“Many banks refuse to open accounts for cannabis businesses, despite the fact that
So marijuana businesses are looking for solutions — and the farmers are no exception.
At the Sheraton in a
The idea was to establish a “nonprofit financial institution” in which licensed marijuana farmers could get bank accounts or basic loans for homes or automobiles.
“Can we reach out to our community for achieving cooperative results?” Dickerson asked, adding: “We want to be legal. We want to be responsible.”
“It seems like a great new frontier for the feds to come in and screw my farm,” he said. “My question is: 'What is the honest risk?' “
Soon after the session, Dickerson and would-be partners, including credit industry officials involved in private discussions for the venture, called the announcement premature and retracted their press release. They conceded that the notion of a pot growers' credit union was still a dream — a work in progress, with organizers and investors still grappling with how to design such a entity under state and federal laws.
Even with the easing of federal banking rules, establishing a framework for pot banking remains a largely elusive quest.
In late 2013, as
Building on that memo, a year later the Obama administration's
Not wanting to take on that responsibility, many banks chose to stay away.
After the federal guidance came out, “it froze marijuana banking for awhile,” said
Freedman made that observation during testimony before Chiang's cannabis banking group in a
The 16-member panel, including state and local officials, law enforcement, banking industry representatives and financial regulators, convened its first public hearing in
In an interview, Chiang said the panel's end product remains uncertain. He said the group hopes to “put out a menu of options so that the principle players in the banking industry can decide which types of services” they can offer to pot businesses.
And yet Thacker told the panel: “We do not have a transparent banking relationship. We cannot deposit cash into our bank because we would have to lie about the source of those funds. We don't accept credit cards at Caliva. We frankly are at an operating disadvantage against other normalized businesses.”
Chiang said the lack of banking is also a challenge for state tax collectors. He said members of the state
“We're taking about sums that some people would think are unimaginable in regards to carrying on one's own body — hundreds of thousands of dollars … with unknown security concerns,” Chiang said.
However, some financial institutions have embraced marijuana banking. One is
Rosendal said non-marijuana businesses often get approved for accounts at his credit union within 15 minutes. Yet he said, employees take up to 10 days to review potential cannabis accounts and also submit required federal “suspicious business activity” reports. He said it's worth the effort for the credit union and marijuana industry.
“By bringing these 'unbanked' individuals into the financial system, we're hoping to ensure them and their families financial success,” he said.
But Vardaman, who helped write the Cole memo, said states must work to promote disclosure rules and other policies to help ease the fears of financial institutions.
“State legalized marijuana and marijuana banking are inextricably linked,” Vardaman said. “You simply cannot have the former without the latter. That means relevant authorities in states that have legalized marijuana must do everything possible to facilitate marijuana banking.”
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