The banking industry has long shunned the marijuana industry. Banks are fearful of crackdowns by the federal government, despite guidelines issued by the feds. The guidelines are far from clear, and rather than try to risk anything, most banks steer clear of the marijuana industry altogether. This has essentially made the marijuana industry an all-cash industry, which can lead to many problems.
In Colorado, where the marijuana industry is thriving, banking has been a major issue for the industry. In Colorado Governor John Hickenlooper’s state of the State address, he made it clear that banking for the marijuana industry is a top priority of his. Below is an excerpt of his speech, per The Cannabist:
Our new marijuana industry must continue to confront both public health and public safety concerns.
At this time last year, we faced the question of whether it was possible to have a legitimate recreational marijuana industry.
To date, evidence shows that our regulatory system is beginning to work.
We have worked from scratch, with health officials, industry, law enforcement, concerned parents and regulators, and the General Assembly, to develop robust regulations that allow the industry to develop and prosper in a safe and legitimate way.
Both the Brookings and the Cato Institutes have commended our work.
But we know challenges remain.
One of the ongoing public safety concerns is that the marijuana industry operates largely in cash, without traditional forms of banking. Cash-only businesses invite corruption, just look at the history of Prohibition.
We will continue to push the federal government to allow banking for this industry.
Having an all cash industry, involving marijuana or otherwise, is far from optimal. It creates logistic issues for the marijuana companies who have to figure out what to do with all of the cash. It creates a potential public safety issue as marijuana business could be a target for robberies. Clear, comprehensive banking reform for the marijuana industry is overdue, in Colorado and beyond.
