Pubdate: Thu, 14 Jul 2016
Source: Portland Mercury (OR)
Column: Cannabuzz
Copyright: 2016 The Portland Mercury
Author: Josh Jardine


It's Still Impossible for Cannabis Businesses to Open Bank Accounts

AT A RECENT cannabis event I went to, the crowd was made up of 
cannabis professionals: dispensary owners and staff, growers, edible 
makers, processors, and wholesalers. Among the speakers was the head 
of the Oregon Liquor Control Commission's (OLCC) cannabis program. 
During the Q&A, a grower brought up how that very week, his bank 
account had been shut down-the third time in the past year.

"The bank said it's because I'm involved with cannabis," he said, 
"and I wanted to ask you a question: I pay my taxes and fees to the 
OLCC in cash, which I made growing and selling cannabis. I take it 
the OLCC has a bank account. Correct?"

The OLCC official nodded yes.

"And may I ask where the OLCC banks?"

"US Bank," said the official, with a slight smile.

"That's interesting. That's the same bank that just shut down my 
account, again. How is it that when I deposit my money, I'm a 
'criminal with drug sale money,' but when you do it, it's 'important 
tax revenue'?"

The OLCC official did not have an answer, and if he had, it would 
have been drowned out by the roars of approval from the crowd.

After respect, a bank account is the hardest thing most canna 
industry folks have getting. It's no exaggeration that most people I 
know who work in cannabis have had their accounts shut down two or 
three times. The current record that I'm aware of is a grower who's 
had their account closed five times.

I asked my bank, Wells Fargo, if I could open an account under my 
business name, which has the word "Cannabis" in it. After 
establishing that I wasn't growing, selling, or making cannabis 
edibles, she asked if I ever handled the jazz tobacco.

"It's not going to get into the vaporizer by itself, so..." (Her 
stony face said I wasn't making any friends.) "I often present 
artists with gift bags that have cannabis and cannabis products in them, yes."

"Then no," she answered. "If you are literally touching it, then we 
would have to shut your account down." (And never mind touching it. A 
trade group I'm a member of-which never handles cannabis but has the 
word "cannabis" in their name-had its account shut down last week.)

I've talked with people who have paid absurd "special handling fees" 
to open and maintain a cannabis-related account. Others tell of 
sympathetic bankers taking deposits with a nod and a wink, helping 
the account holder maintain the account for as long as possible 
before the inevitable shutdown. Still others create fake business 
names as a front. No one is happy.

For its many, many, many flaws, Facebook is a great way to gauge 
hot-button topics, and in Facebook cannabis groups (at least the ones 
Zuckerberg hasn't shut down yet), the subject is constantly 
mentioned. I recently saw a post from a grower furious at yet another 
shutdown. A regular contributor to these groups, well-intentioned but 
frequently wrong, replied, "If you have your recreational and medical 
license paperwork from the state, you can go to M Bank Credit Union, 
and they will open an account for you."

No, you can't. I know because I called M Bank.

"Nope. That's bullshit," said the high-ranking staff member I spoke 
with, who asked that I not use his name. "We did have accounts 
available for about six months last year, but we shut that down after 
the feds sent us a letter saying we were putting our FDIC [Federal 
Deposit Insurance Corporation] participation at risk by doing so."

I asked if he saw that changing if and when the feds remove cannabis 
as a Schedule I drug.

"Honestly, no. The big banks don't have any interest; they don't need 
the money, and they view cannabis as they do pawn shops and strip 
clubs-high-cash intake businesses are often a cover for money laundering."

I asked him what he would suggest. "Buy a damn good safe, and get 
used to paying in money orders from Fred Meyer."

Fantastic. I think I need to go "handle some cannabis" in light of 
this stellar recommendation.
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MAP posted-by: Jay Bergstrom