Con­cerns grow over how to bank cash crop

Boston Herald - - NEWS - By JOR­DAN GRA­HAM

Pot shop pur­vey­ors need a place to de­posit all the cash they will reap be­gin­ning next sum­mer with jit­tery bankers re­luc­tant to open ac­counts re­lated to mar­i­juana — a burn­ing is­sue the state’s pot czar warned won’t be easy to solve.

Steven Hoff­man, chair­man of the state Cannabis Con­trol Com­mis­sion, said it’s one of the top is­sues the board needs to ad­dress quickly.

“It’s on our to-do list, and we’re go­ing to work with other states who have ob­vi­ously dealt with the same is­sue,” Hoff­man said af­ter ap­pear­ing on Bos­ton Her­ald Ra­dio’s “Morn­ing Meet­ing” show yes­ter­day. “We know it’s a re­ally im­por­tant and dif­fi­cult is­sue.”

Be­cause mar­i­juana is still il­le­gal un­der fed­eral law, few banks are will­ing to of­fer ac­counts to the cannabis in­dus­try. With­out banks to safely hold money, the in­dus­try would be forced to rely en­tirely on cash not just for consumer sales, but whole­sale and refin­ing and cul­ti­va­tion trans­ac­tions.

“The idea of hav­ing an all-cash busi­ness, that’s prob­lem­atic,” said Jim Borgh­e­sani, a cannabis ad­vo­cate. “Frankly, no one wants an all-cash busi­ness.”

Even one bank of­fer­ing ser­vices is far from ideal, in­dus­try ex­perts said.

“There’s al­ways the risk you could lose your bank ac­count at any point,” said Kris Krane, pres­i­dent of 4front Ven­tures, a med­i­cal pot con­sult­ing com­pany. “We’ve def­i­nitely seen banks that have got­ten in and de­cided they no longer want to par­tic­i­pate.”

Many of the banks are bas­ing the le­gal­ity of their ser­vices on two fed­eral memos re­leased by the Obama ad­min­is­tra­tion in 2013 and 2014 that say states that have le­gal­ized recre­ational mar­i­juana and banks that service cannabis-re­lated busi­nesses will be left alone if they fol­low cer­tain cri­te­ria, in­clud­ing strict re­port­ing and over­sight. Those memos only rep­re­sent Depart­ment of Jus­tice and Trea­sury Depart­ment pol­icy and could be re­placed or re­scinded at any time.

U.S. At­tor­ney Gen­eral Jeff Ses­sions is an out­spo­ken critic of mar­i­juana, and has some fear­ing a crack­down on grow­ers, sell­ers and even states that have le­gal­ized weed.

In a let­ter to Wash­ing­ton state of­fi­cials, Ses­sions em­pha­sized the fed­eral gov­ern­ment’s abil­ity to pros­e­cute mar­i­juana-re­lated crimes in states that have le­gal­ized recre­ational use.

“It ul­ti­mately comes down to the fed­eral gov­ern­ment,” Krane said, adding he is skep­ti­cal Ses­sions will ac­tu­ally crack down on states that le­gal­ized mar­i­juana. “If the feds were to make a de­ci­sion that banks are not al­lowed to do busi­ness, then banks will leave no mat­ter what the state does.”

HIGH ANX­I­ETY: The Bay State’s de­vel­op­ing mar­i­juana in­dus­try may hit a snag if busi­ness own­ers can’t find a way to bank their prof­its.

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