Banks Jittery Over Legal Status, Turn Away Colorado’s Medical Pot Shops
August 9, 2010
(ChattahBox)—The owners of medical marijuana dispensaries in Colorado can’t find a bank willing to even, accept their deposits, never mind offer small business loans. The situation is becoming so dire that pot dispensaries are being forced to operate an all-cash business, essentially stuffing their mattresses with cash. Colorado officials are concerned a cash business model would lead to crime and difficulty in assessing sales taxes. But the banks are leery over taking deposits from businesses selling a drug that the federal government deems illegal.
Wells Fargo & Co was the last remaining area bank willing to accept accounts from dispensaries, but the bank stopped the practice and sent out notices to existing account holders, saying their accounts would be closed on October 4.
Until banks receive a legal directive from the federal government resolving the conflict between state and federal laws, financial institutions will continue to refuses to participate in possible illegal transactions.
And according to the Denver Post, forcing medial marijuana dispensaries to operate on a cash-only basis has state officials concerned:
“State Sen. Chris Romer, a Denver Democrat who sponsored the new dispensary rules at the legislature this year, said if dispensaries have to conduct all their transactions in cash, it will make it harder to track their activity. That, Romer feared, could undermine new regulations requiring detailed accounting by dispensaries in the hopes of bringing more transparency to the industry.”
“It would be bad for our compliance regime if they had to do 100 percent cash,” Romer said.
Colorado is one of a growing number of states that have decriminalized marijuana for medical use. And since January, at least 70 medical dispensaries have opened up for business in the rocky mountain state.
Photo Source: Wikimedia Commons/Laurie Avocado/Medical marijuana neon sign at a dispensary on Ventura Boulevard in Los Angeles.