Concerns grow over how to bank cash crop
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 Those memos only represent Department of Justice and Treasury Department policy and could be replaced or rescinded at any time.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.