Aside from the bothersome act of withdrawing money from the nearest ATM, banks lacking involvement in the marijuana industry isn't a major area of concern for the frequent consumer.
For dispensary owners, the lack of access is a major area of concern.
That’s why Oregon Governor Kate Brown is helping close the gap between banks and cannabis companies.
“It puts employees, consumers, regulators and communities at risk," said Betty Aldworth, Deputy Director of the National Cannabis Industry Association. In a recent interview with Huffington Post, Aldworth discusses the risks a business is taking by not banking.
“A lack of access to banking services is, quite frankly, the single most dangerous thing about the legal sale of marijuana for medical or social use,” Aldworth says.
Many people within the cannabis industry share their frustration in the fight between state and federal law. It's this vocal push from advocates that recently led Gov. Kate Brown of Oregon to sign a bill protecting financial businesses from criminal prosecution statewide.
Simply put, if a marijuana business in Oregon was to use a local credit union or small state bank, this would be perfectly legal. The bill, however, does not protect financial institutions from federal prosecution due to the illegality of marijuana on a federal level.
So why are banks not floating the funny money? One major contribution is the theoretical argument of violation against the controlled substance act in court. If a bank was brought to court under the charges of denying financial service to a legitimate business, they would argue that marijuana is a controlled substance and by the Controlled Substance Act, it is illegal to fund any business related to that substance.
It’s no surprise why banks get sketched out. Because marijuana is still illegal federally, they fear they will be prosecuted as money laundering in the attempts to legally finance marijuana businesses. According to the US Treasury, however, they are perfectly capable of legally servicing marijuana companies within specific guidelines. This still doesn’t seem to hold any comfort for banks, though, which circles back to the cannabis industry fretting over the financial state of their business.
“When a small business such as a marijuana dispensary can’t access basic banking services they either have to become cash-only – and become targets of crime – or they’ll end up out of business,” says Jared Polis, a cosponsor of the Marijuana Businesses Access to Banking Act of 2013.
As marijuana sales skyrocket, companies have been forced to deal under the table. Transactions are always in cash, meaning business exchanges and payments are cash as well. It’s a seedy practice that many dispensary owners are tired of.
“I can’t bank my money,” said Jamie Perino, owner of three Denver recreational marijuana dispensaries.“It’s really frustrating, when I go to pay my federal taxes, you get a 10 percent penalty for paying in cash, but we can’t have a bank account. So it’s just a big Catch-22.”
Other advocates of banking support, like Executive Vice President Mark Goldfogel, lay out the drastic risk these businesses are taking.
“In 2016, $1.2 billion in cash will be transacted by the cannabis industry in Colorado. That’s all in $20 bills. At some point somebody will die. And then we will be allowed to bank.”
Are you over 18?
Governor Brown’s signature on this new bill to protect financial businesses is a step in the right direction.