The lone bank in the state of Colorado that was publicly doing business with the flourishing medical marijuana industry decided it will be closing all of those accounts by the end of September, leaving businesses across the state scrambling for other options according to an article from The Daily Camera.
Colorado Springs State Bank vice president John Whitten says those issues need to be resolved before banks can resume handling those transactions. Whitten said the bank’s parent company, Herring Bank, does business in Oklahoma and Texas, both states where medical marijuana is not legal.
Whitten says those issues need to be resolved before banks can resume handling those transactions.
“There are unresolved issues with regulations, law enforcement and other agencies that need to get resolved before the industry can progress and become bankable,” Whitten said.
A letter last week to operators of medical marijuana dispensaries asked them to shut down their accounts by the end of September, Whitten said.
Dispensary owners said smaller businesses that have had long relationships with local banks and don’t have words such as “marijuana” or “cannabis” in their company names or websites advertising their business might be able to keep their accounts. But since dispensaries do a lot of their business by cash, national banks often flag the transactions made by the local branches.
With banks unwilling to do business with the marijuana industry, Colorado dispensaries said they are left with a Catch-22. State law requires that they keep track of their transactions, but that becomes hard to do with federal law scaring off banks.
Diane Czarkowski, one of the owners of Boulder Kind Care, said the dispensary, which now has an account at Colorado Springs State, has been through six other banks since it opened in October 2009. She said Kind Care is now talking to a local bank.
“I think a lot of people will be in a really bad position,” she said. “They will be forced to do things under the radar, which is not helpful to the industry.”
Whitten said banks would probably consider reopening their doors to the medical marijuana industry if federal laws change.
Back in 2009, the Obama Administration said they wouldn’t use “justice department resources to circumvent state laws” on medical marijuana. But now, federal prosecutors are intimidating those medical marijuana industry, banks included, in an attempt to end these programs.