Marijuana distributors want banks, not cash

DENVER — Frustrated by the cash-heavy aspect of its new marijuana industry, Colorado is trying a long-shot bid to create the world’s first financial system devoted to the pot business.

But Colorado’s plan to move the weed industry away from dank-smelling cash to easily auditable banking accounts is a Hail Mary pass that won’t work, industry and regulatory officials agree.

“It’s definitely creative, but I don’t know whether it’s a solution or just a statement,” said Toni Fox, owner of 3D Cannabis Center in Denver.

Here’s the plan approved by state lawmakers Wednesday — state-licensed pot growers and sellers would pool their cash into uninsured financial cooperatives. The cooperatives would then ask the U.S. Federal Reserve System to let them access so-called “merchant services,” a broad category that includes accepting credit cards and being able to write checks.

The Federal Reserve had no immediate response Thursday to Colorado’s cooperative plan.

The cooperative stratagem is a response to marijuana guidance issued in February by the U.S. Treasury Department.

Marijuana shops in Colorado and elsewhere have been clamoring for years for access to traditional banks, complaining of dousing cash in air freshener to try to dupe banks. Others pile cash in self-storage units or safety deposit boxes, requiring frequent trips to exchange the cash for money orders in order to pay employees and utility bills.

The February Treasury guidance, though, was met with a shrug by many banks. Banks generally considered the elaborate reporting requirements associated with taking marijuana customers too onerous to bother with. Instead, Colorado authorities hope the Federal Reserve will allow new marijuana co-ops to access merchant services if the co-ops agree to bear all the cost of complying with the marijuana banking guidance, as well as assuming all the risk.

It sounds like a long shot even to marijuana industry workers.

“I don’t see it,” said Shawn Coleman, a Denver-based lobbyist who represents marijuana retailers. “The administration has gone as far as they possibly could to help the marijuana industry without an act of Congress.”

And despite complaints from banking groups and pot shops about Treasury’s pot guidance, there are signs the guidelines are working for some. And a handful of small credit unions in Colorado and Washington state do serve marijuana clients, though many won’t talk publicly about it.

“There are banks who are doing this, but we don’t know who these banks are or who they are serving,” Coleman said.

Asked whether he’d advise his clients to consider an uninsured financial co-op as an alternative to constantly skipping around from bank to bank, Coleman didn’t hesitate. “Absolutely not,” he said.

For example, Fox’s Denver dispensary has never lost an account with the bank she’s had since she owned a landscaping company before Colorado’s retail medical marijuana industry took off in 2009. She just won’t tell a reporter which bank it is.

Her bank didn’t pull her account after the February guidance, but Fox said her bank did hike her fees. She simply pays it.

“We would pay whatever it took to have financial security,” Fox said.

The architects of Colorado’s marijuana banking gambit concede that it’s far from certain whether cannabis-specific cooperatives would ever get off the ground. But they say the bill’s passage should at least signal to banks and federal regulators that the marijuana industry is willing to go to great lengths for consistent banking services.

“I hope at least in the short term this will show the banks that this is a legitimate business,” said Brian Vicente, a Denver attorney who advises marijuana clients in regulation and banking compliance.

Washington state is closely watching Colorado’s new banking plan, said Scott Jarvis, director of Washington’s Department of Financial Institutions. But the big question remains that it requires action by the Federal Reserve: “That’s been the mystery all along. If it’s allowed, it could all happen.”

A few banks or credit unions in Washington plan to do business with licensed marijuana growers and processors, he said, but it will be extremely difficult for pot shops to obtain even basic checking accounts.

That’s because institutions believe it’s harder to monitor retailers in compliance with Treasury Department guidelines than it is to monitor processors and growers.

“If the feds say you can have access to the federal system, that’s another mechanism.”

Washington’s Legislature doesn’t return to business until January, so no banking action is imminent here.

“In the meantime, we’ll see how the market goes and how many institutions are willing to dip their toe in the water,” Jarvis said.

Colorado’s banking plan awaits the signature of Democratic Gov. John Hickenlooper, who is expected to sign it. There’s no timeframe for marijuana shops to start forming cooperatives, or for the Federal Reserve to decide whether to allow them to take credit cards and write checks.

The pot banking plan originally expired in 2017, but Colorado lawmakers amended the bill to remove the expiration date.

“It may take that long for this to get off the ground,” joked Sen. Pat Steadman, one of the bill’s sponsors.

ad-high_impact_4
News
Clark County Schools announce random searches
Clark County School District middle and high school students will be subject to random searches for weapons under a new initiative to combat the wave of guns found on campus. (Amelia Pak-Harvey/Las Vegas Review-Journal)
Ron Jeremy and Heidi Fleiss React to Dennis Hof's Death
Ron Jeremy and Heidi Fleiss speak about their friend and prominent brothel owner Dennis Hof's death at Dennis Hof's Love Ranch. (Benjamin Hager/Las Vegas Review-Journal)
Nevada brothel owner Dennis Hof has died
Nevada brothel owner and Republican candidate for Nevada State Assembly District 36, Dennis Hof has died. He was 72. Nye County Sherriff's office confirmed. Hof owned Love Ranch brothel, located in Crystal, Nevada.
Las Vegas police investigate suspicious package at shopping center
Las Vegas police evacuated a southeast valley shopping center at Flamingo and Sandhill roads early Tuesday morning while they investigated reports of a suspicious package. (Max Michor/Las Vegas Review-Journal)
The Las Vegas Metro hosts the K-9 Trials
The Las Vegas Metro K-9 Trials returns to the Orleans Arena to benefit the Friends For Las Vegas Police K-9 group.
Kingman residents love their little town
Residents of Kingman, Ariz. talk about how they ended up living in the Route 66 town, and what they love about their quiet community. (K.M. Cannon/Las Vegas Review-Journal)
Service at Southern Nevada Veterans Memorial Cemetery
Twelve unclaimed veterans are honored at Southern Nevada Veterans Memorial Cemetery in Boulder City in Oct. 9, 2018. (Briana Erickson/Las Vegas Review-Journal)
Las Vegas house prices reach highest level in 11 years
Las Vegas house prices are rising But so is the amount of available homes on the market Still, properties priced below $300,000 are selling fast And September was the first time since June 2007 that the median house price reached the $300,000 mark Las Vegas home prices have been rising at one of the fastest rates in the country over the past year Recent data show the market is now less affordable than the national average
National Night Out
About 100 Summerlin residents gathered at Park Centre Dr. in Summerlin on Tuesday for National Night Out. Lt. Joshua Bitsko with Las Vegas Metro, played with 3-year-old David who was dressed as a police officer. Face painting, fire truck tours and more kept kids busy as parents roamed behind them. (Mia Sims/Las Vegas Review-Journal)
Rural homeless issue comes to a head in Pahrump
On Sept. 12, Pahrump sheriff deputies told residents of a homeless encampment on private property that they had 15 minutes to vacate and grab their belongings. That decision might face some legal consequences. (Rachel Aston/Las Vegas Review-Journal)
Remembrance blood drive on October 1
A blood drive was held at the Las Vegas Convention Center on the one year anniversary of the Oct. 1 shooting. (Mat Luschek/Las Vegas Review-Journal)
Remembrance Lights memorial unveiled at St. Rose hospital
A dedication ceremony was held at St. Rose to unveil a memorial and to read the names of those who died on October 1, a year ago. (Mat Luschek/Las Vegas Review-Journal)
1October Blood Drive Remembrance Wall
(Mat Luschek/Las Vegas Review-Journal)
1October Blood Drive
Vitalent hosts a blood drive at the Las Vegas Convention Center on Monday, Oct. 1, 2018, the first anniversary of the Las Vegas shootings. (Mat Luschek/Las Vegas Review-Journal)
1October sunrise remembrance ceremony in Las Vegas
Myanda Smith, sister of Las Vegas shooting victim Neysa Tonks, speaks at the sunrise remembrance ceremony at the Clark County Government Center in downtown Las Vegas, Monday, Oct. 1, 2018. (Chitose Suzuki/Las Vegas Review-Journal)
‪Gov. Brian Sandoval speaks to crowd at Oct. 1 sunrise remembrance ceremony ‬
‪Nevada Gov. Brian Sandoval speaks to the crowd at the Oct. 1 sunrise remembrance ceremony ‬at the Clark County Government Center in downtown Las Vegas, Monday, Oct. 1, 2018. (Michael Quine/Las Vegas Review-Journal)
Father of Route 91 Harvest festival shooting victim talks about college scholarship in his daughter's memory
Chris Davis, father of a Route 91 Harvest festival shooting victim, Neysa Tonks, talks about a college scholarship in his daughter's memory to assist the children of those who died in the shooting. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Oct. 1 survivor Malinda Baldridge talks about life after the shooting
Malinda Baldridge of Reno attended the Route 91 Harvest festival with her daughter, Breanna, 17, and was shot twice in the leg when the gunman fired on the crowd.
Route 91 survivor talks about lack of progress in gun legislation
Heather Gooze, a Route 91 survivor, talks about lack of progress in gun legislation since the Oct 1. (Bizuayehu Tesfaye/Las Vegas/Review-Journal) @reviewjournal
Review held in death of man after encounter with Las Vegas police
The mother of Tashii Brown, who died after an encounter with Las Vegas police on the Strip, not satisfied after public review of evidence. (K.M. Cannon/Las Vegas Review-Journal)
Clark County Museum opening "How We Mourned: Selected Artifacts from the October 1 Memorials"
The Clark County Museum is opening an exhibit "How We Mourned: Selected Artifacts from the October 1 Memorials" of items left to honor the victims killed in the Route 91 Harvest festival shooting. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Memorial service for former RJ lawyer Mark Hinueber
Mark Hinueber, the Review-Journal's former lawyer and defender of the First Amendment, died in Las Vegas on Aug. 23. Hinueber, who was 66, worked at the RJ and other newspapers for 42 years. On Saturday, his friends and family gathered for a memorial service.
Army veteran honored in Henderson event
Army Sgt. Adam Poppenhouse was honored by fellow veterans in an event hosted by a One Hero at a Time at the Henderson Events Center.
Michelle Obama and Keegan-Michael Key urge Nevadans to vote
Former first lady Michelle Obama and comedian Keegan-Michael Key urged Nevadans to vote at Chaparral High School in Las Vegas Sunday, Sep. 23, 2018. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Nevada Task Force One Cheers Golden Knights
Nevada Task Force One Cheers Golden Knights
1 dead, 1 wounded in North Las Vegas standoff
A woman was hospitalized with serious injuries on Thursday morning after being shot inside a North Las Vegas house. Police responded about 11 p.m. to a shooting at a home on the 5600 block of Tropic Breeze Street, near Ann Road and Bruce Street. The wounded woman, police believe, was shot by a man, who later barricaded himself inside the house. SWAT was called to assist, and when officers entered the house, they discovered the man dead from an apparent self-inflicted gunshot wound.
Las Vegas Teen Makes Clothing Resale His Side Hustle
Las Vegas resident Reanu Elises, 18, started buying and selling streetwear online when he was a high school junior. Like many other young adults, the world of online resale applications like Depop and Mercari have made selling clothing online for a profit easy. Now, Elises spends his free time at thrift shops looking for rare and vintage clothing he can list on his on his shop. Now in his freshman year at UNLV as a business marketing major, Elises hopes to open a shop of his own one day and start his own clothing brand. He estimates that he's made about $1000 from just thrifted finds in the past year, which he'll use to buy more thrift clothing and help pay for expenses in college. (Madelyn Reese/ Las Vegas Review-Journal) @MadelynGReese
Fruition Vineyards Encourages Young Entrepreneurs to "Buy, Flip, Dream"
Once a month, young adults gather at Fruition Vineyards on South Maryland Parkway near UNLV to dig through a stack of rare, vintage and designer clothing that's marked down well below it's resale value. Shop founder Valerie Julian began the vent, dubbed "Fruition Vineyards" in August after running her streetwear shop since 2005. The event gives young entrepreneurs the opportunity to "buy, flip, dream" according to Jean. Meaning that they're encouraged to buy the clothing for sale and find a way to resell it for a profit, then reinvest that into whatever dream they pursue: college, a hobby or their own resale business. Shoppers lined up starting an hour before noon on the last Saturday in April for the opportunity and spoke about what they hoped to do with their finds and profits. (Madelyn Reese/Las Vegas Review-Journal) @MadelynGReese
Local man goes under cover searching for answers to homelessness
Licensed mental health therapist Sheldon Jacobs spent 48 hours under cover posing as a homeless man in an attempt to gain perspective on the complex issue.
Social Work UNLV Lecturer's Calling
Ivet Aldaba-Valera was the first person in her family to graduate from both high school and college. The 33-year-old UNLV lecturer is now pursuing her Ph. D in public policy at the school and has used her degree in social work to engage with the young Latino and Latina community of Las Vegas. (Madelyn Reese/Las Vegas Review-Journal) @MadelynGReese
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like