Life in the Rockies during spring time can be a little confusing. A Freezing cold blizzard one day, 70 degrees and beautiful the next. Those dramatic swings in ones comfort level are not limited to the weather.
Sure, Colorado’s MMJ collectives can market themselves and sell their chronic inventory without fear of state interference — with fingers crossed and Amendment 64 passed, recreational pot shops hope to do the same once guidelines and regulation are established later this year.
Despite all of their progress in the public opinion arena, there are few safe-harbors for the cash earned by those within the marijuana business model…medical or otherwise.
By David Migoya – No bank, credit union or financial-services company can knowingly accept business accounts with any trace of a marijuana connection. If they do, it’s a federal crime.
The result is a legal industry that operates in something of a gray market in Colorado.
“It’s a cash-only business for some; others use a small bank and are very quiet about it since no one wants to draw attention,” said Joe Megyesy, a blogger and organizer behind Amendment 64, which legalized the sale and use of small amounts of pot in Colorado. “It’s a problem.”
Dispensaries struggle with issues as basic as payroll, operational funding and security. They cannot get a loan, a checking account, a credit card or anything that other legal businesses can do easily.
Little is known about where their money goes — pot-related revenue for fiscal 2011 in Colorado was an estimated $186 million, a number that doesn’t count those who aren’t paying state taxes. Predictions for the looming recreational market range as high as $300 million a year.
“Without access to financial institutions, legitimate businessmen and women are left walking around with thousands of dollars in cash, not only putting them at personal risk, but also leaving millions in state tax revenue uncollected and making it impossible for state or federal authorities to undertake an audit,” Rep. Jared Polis, D-Boulder, told The Denver Post in a statement.
Polis has introduced a bill to defederalize marijuana, which could have the effect of opening bank doors to marijuana-based businesses. Similar efforts have failed.
A state task force put together by Gov. John Hickenlooper shortly after voters last November approved recreational use of weed determined there’s no way around the conundrum without federal action.
Federal drug laws put marijuana on the list of controlled substances with cocaine and heroin. Possessing it is a crime, as is selling it or handling any of the resulting financial proceeds.
In essence, institutions that bank marijuana-specific businesses are, in the eyes of the federal government, money launderers.