Yes, it turns out some of the rumors you have heard are probably true. The marijuana business is a billion dollar industry, though not because it’s run by drug lords. This business is legit in 23 states and thus fully strives on the same business ethics as any other. It is the demand and ever new uses of marijuana for medicinal purposes that it’s demand and prices have sky rocketed.
But not all that glitters is gold, with so much money in the industry there is a continuous struggle for business owners to keep their money safely. Well, anyone with a business acumen will wonder why the hell they don’t bank the money if the business is as legit as they claim.
Why don’t banks accept medical marijuana businesses to open accounts with them?
According to some marijuana business owners we have talked to, some banks have told them that serving their businesses could lead to the banks’ losing their FDIC insurance. However, a 2014 directive from the Financial Crimes Enforcement Network (FinCEN, a division of the U.S. Treasury) provides some clarity on the issue: Banks can serve those businesses, as long as they follow strict anti-money-laundering procedures.
Nevertheless, pot business owners across Oregon have opened accounts only to have them quietly closed when the bank discovered the nature of their enterprise. As a result many pot businesses have to go old school and conduct their transactions strictly on cash basis. This is most unfortunate in this error of technology and internet banking. As a matter of fact huge safes are a common sight in marijuana dispensaries, a necessity when handling so much cash. By ignoring the discontent of these business owner the government causes more harm than good.
A cash conundrum
By forcing Oregon business owners to operate on a cash-only basis, current federal laws are making marijuana businesses sitting ducks for violent crimes and perpetuating negative stereotypes. They’re also facing other hardships: Cannabis businesses aren’t eligible for tax deductions and often have trouble renting space because landlords fear banks could pull their mortgage for paying loans with money connected to pot. Add to that the headache of doing business accounting and paying taxes in cash.
Double standard tendencies in banks
Many medical marijuana business men have complained of having up to five credit cards canceled simply because they run a dispensary or delivery business.In Oregon there have been numerous complaints from various dispensary owners that some banks like Bank of America and Wells Fargo have closed their accounts without any due cause.
After multiple requests for an explanation, the banks have released similar statements that marijuana whether recreational or medical is still considered illegal by federal law. Therefore since the banks are regulated by the federal government they dare not deal with anyone handling marijuana. This in my opinion is the highest level of double standards. It’s unfortunate that where banks stand to gain, they forsake federal law for state law but do the reverse when it conveniently suites them.
Hopefully the federal government will see that keeping medical marijuana as an illegal drug is causing more harm than good and thus change its status on this.