Colorado Cannabis Dispensaries Shut Out by Banks
Posted by Laura Vladimirova | August 30 2011 | 6396 views | Comments ↓
Colorado banks are shutting out marijuana businesses.
(Click to enlarge)
Colorado Springs State Bank, Colorado’s last bank to house marijuana industry-related accounts, is telling their customers to take their business elsewhere. The bank plans to shut down marijuana accounts at the end of September.
"There are unresolved issues with regulations, law enforcement and other agencies that need to get resolved before the industry can progress and become bankable," said John Whitten, Colorado Springs State Bank president to the Daily Camera.
Herring Bank, the parent company, operates in Texas and Oklahoma where marijuana is prohibited, and cites this as a conflict of interest.
Marijuana businesses across the state are left to figure out how to keep track of their finances and keep in line with Colorado’s state laws as they are required to keep strict records of their transactions. Without proper banking services, this becomes a difficult and consuming task. Colorado is the only state that allows it's medical marijuana businesses to operate as for-profit endeavors.
Dispensary officials have considered “cash-only” transactions, but believe this puts them at a higher risk for criminal activity. Also, it sets business practices backwards as they won’t be able perform the electronic transactions their customers are used to.
Members of dispensary groups say marijuana professionals will be “forced to do things under the radar, which is not helpful to the industry."
Back-alley techniques include maintaining accounts under business pseudonyms and avoid using words like “marijuana” or “cannabis” in official titles, which puts dispensaries in legal jeopardy.
Bank officials attempted to make amends with their dejected clients.
"There are good people in the industry, and smart people. Those are the kinds of customers banks want to have, and they will be the first ones banks go back to when the legal issues are resolved,” said Whitten in the Daily Camera article.
President of the Colorado Springs Medical Cannabis Council, Tanya Garduno, told The Gazette that, “It was a pretty abrupt decision.”
With few options on the horizon, the Colorado cannabis community is left struggling to find solutions.
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Saturday, 27 August 2011
Article by Laura Vladimirova, on Aug. 30th 2011