Everyone loves NPR’s show Planet Money, and on February 6th, the show ran a special edition called Big Weed, in which they explored the ins and outs of the industry, and why it is so hard for legitimate dispensary businesses in places where cannabis is legal to open bank accounts and do the other things that regular businesses need to do. This was a very interesting edition of their show, and a much needed wake-up-call to the world that cannabis business owners deserve to be treated like everyone else.
The episode focused on following up with a marijuana business owner who had tried in 2012 to open a bank account in Washington State to support his new business endeavor. While at first he was granted an account for his legal dispensary, he was later contacted by the bank and told that they had to get out of their contract because the bank would no longer service them, and would not risk being put in a position where a marijuana-centered business owed them money.
The company, called the “Northwest Patient Resource Network,” is still having trouble getting a bank account, despite the fact that cannabis is legal in some form in 23 states, and decriminalized in many more.
The business is still operating on a cash only basis, and when the hosts of Planet Money were in town visiting the dispensary, they actually witnessed an issue where the regularly scheduled pickup by an armoured car for the store’s cash didn’t happen, and they had more cash on hand then they could physically fit into their safe.
“When you're running a business that operates with so much cash, it makes everything more expensive,” stated David Kestenbaum, one of the hosts of Planet Money. “Like, he's built these separate safes - one for pot, one for cash - 'cause you don't want your cash to smell like pot. And the whole place has been set up with like bank level security. He was worried about getting robbed.”
The owners of the dispensary revealed that they have had to fend off a robbery attempt because of all the cash on hand, and that they have tried “backdoor banking” where they opened a personal bank account and hoped the tellers wouldn’t ask too many questions about all the cash deposits. They also aren’t allowed to hire armed guards for their business, as this is against the law in Washington, and they can’t take out loans, since the asset they possess, cannabis, is not something that bankers are comfortable accepting as collateral. Clearly, it is going to be difficult for Northwest Patient Resource Network, or any other cannabis organizations who wish to be legitimate, to grow their businesses under these kinds of conditions.
“It is amazing to me in hearing all this how much power the feds have in the situation,” Kestenbaum stated during the program. “I mean, they haven't been running around shutting down businesses and arresting people. But quietly, they're just making it extremely hard for the pot economy to thrive. It's almost like they've put economic sanctions on these businesses in Washington State and Colorado and all these other states. In big ways, these businesses are cut off from a lot of financial infrastructure.”
While this is still clearly a huge problem for businesses looking to be legitimate and also involved with cannabis, more and more legislation in favor of cannabis users and sellers is happening every day, and it appears to be just a matter of time before banks will have to relent and start accepting these businesses as legitimate and allowing them to bank and take out loans.
“This has gotten a little bit better,” reports Kestenbaum. “It is now possible in some banks to walk in and say ‘I'm a pot dealer. I would like a business checking account. You know, I want little checks with the little logo and the name of my company, House of Ganja or whatever, so I can pay my taxes and pay my people.’”
With any luck, we will see complete acceptance of cannabis by banks and lenders over the next few years. In the meantime, programs like this are helping to spread the word about this issue and how it should be addressed.