Ohio is finally beginning to address banking issues with companies that provide products associated with the cannabis industry, but do who not necessarily work directly with the flower itself.
According to an article in Crain’s Cleveland Business, “one proposed option is a “closed-loop” system that would allow the tracking of money and sales, which the government wants, but doesn’t seem to really address systemic banking issues complicating work in the industry.”
The article goes on to explain the proposed system seems innovative and has been proposed in states with already established legal marijuana programs like Colorado, but have never been implemented.
Garret Fortune is the CEO of FunkSack, a company from Cleveland, now based in Denver, that makes plastic child-resistant, odor-proof bags and packaging. His client base includes cultivators, growers, and distributors; “the very customers Ohio banks have kicked him out for working with,” says the article.
“In terms of business,” explains Fortune, “the only fears I have are with banking.”
This has been a systemic problem across the country in states that deal with legalized cannabis. Marijuana-related businesses are typically forced to deal directly with cash since banks are uneasy about dealing with money derived from sales of a product that is still against federal law.
President Barack Obama issued the Cole Memo in 2013, which ultimately says the federal government will not go after financial institutions and legal marijuana businesses as long as they comply with complex regulations. However, banks are reluctant to take the risk of violating any of the regulations considering they could lose their federal insurance.