Pubdate: Thu, 31 Aug 2017
Source: Tampa Tribune (FL)
Copyright: 2017 The Tribune Co.
Author: Justine Griffin, Times Staff Writer


Opening a medical marijuana dispensary in Florida naturally comes with
a lot of red tape.

Marijuana is still considered an illegal substance at the federal
level, despite the 29 states that have legalized it for recreational
or medicinal use in recent years. That makes it nearly impossible for
banks to fund marijuana distributing companies, which in turn makes it
hard for those companies to sign a lease for a store or warehouse or
even get insurance.

But one Orlando area community bank is willing to take on the

First Green Bank, a community bank that began in 2009, is working with
six out of the seven currently licensed medical marijuana dispensing
companies in Florida.

"It all comes down to compliance and transparency, since we're subject
to enhanced money laundering rules," said James Whitcomb, the chief
financial officer of Surterra Holdings Inc., an Atlanta-based medical
marijuana company which has grow operations and dispensaries in
Florida, including in Tampa. Surterra is a client of First Green Bank.
"In order for banks to be compliant with us as customers, they have
perform a lot more due diligence. It basically means they have to
track every single transaction we make to ensure that no dollar goes
to any gang or criminal enterprise," Whitcomb said.

Because federal law makes it illegal to possess or distribute
marijuana -- no matter the laws passed in an individual state -- it's
considered money laundering, according to the American Bankers
Association. It would take an act of Congress to change that. Because
of this, most banks in Florida have steered clear of working with the
state's seven licensed growers and distributors of cannabis.

Lex Ford, a senior vice president at First Green Bank, said he
couldn't think of a competitor in Florida who was willing to try.

"It was interesting at first, when we're telling these high net worth
CEOs how little we could let them dictate the process. We expected
frustration," Ford said about working with marijuana companies. "But
everyone in it understands this is how it has to go."

First Green Bank is a fairly small operation with just six branches,
mostly in Central Florida and one in South Florida. It manages about
$622 million in assets. The bank doesn't have a branch in Tampa Bay
yet. Ken E. LaRoe, a seasoned banker, founded First Green Bank with a
specific purpose in mind. The bank firm actively promotes
environmental and social responsibility and is known for offering
discounts and low-interest loans on "green" initiatives, like electric
cars, LEED-certified construction and solar systems. Now it's added
cannabis to that list.

"Ken's wife used marijuana as treatment for seizures and it changed
her life," said Ford, who describes himself as LaRoe's "wingman."
"That's what started us down this path in 2010, about a year after the
bank was founded. By 2012 to 2013, we were coming up with a plan and
got approvals by 2014."

First Green now employs a team of people who work exclusively with
medical marijuana clients. Most of what they do is manage compliance.
But Ford said it's been a learning process. For example, it's not
uncommon for cannabis companies to deal mainly in cash.

"Cash is still king in this business. That requires us to hire armored
cars to pick it up from the dispensaries," Ford said. The bank then
sends the cash to the Federal Reserve, which deposits it in a
company's account.

"We presented our plan to the FCC, FDIC and every regulatory group out
there possible," Ford said. "It's possible to do this. We just have to
do it right. So we're being as transparent as possible."

Ford said he has every cannabis companies' CEO on speed dial.
Meanwhile he and his fellow banking executives are paying attention to
what happens in Tallahassee, as rules change and more companies are
about to hit the market in Florida each year. The number of licensed
medical marijuana companies in the state will grow to 10 this year,
per legislation passed during a special session in

"First Green takes a lot of the regulatory burden off of us," Whitcomb
said. "We really couldn't be happier with our arrangement. We really
feel like they've got room to scale up, too" as the industry expands.

"A lot of challenges remain. As additional banks get drawn into this
space, more banks will invest in compliance and make it easier on
their clients. There has been a real focus on Florida, and we're
seeing some changes at the highest level for increased competition in
banking in Florida."
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