Marijuana Retailers are Skeptical of New Banking Regulations

The Colorado legislature voted earlier this month to create the first state-run banking cooperative for marijuana sellers; however, many feel this will not solve the problems marijuana companies encounter in banking.

Currently, all banking operations fall under federal jurisdiction; as such marijuana retailers may not open accounts, leaving many to deal with their incoming funds in less than ideal ways.

According to a report by Reuters: “Under the bill, the financial cooperatives would operate similarly to credit unions — without a deposit insurance requirement — and would be governed by the state’s financial services commissioner.”

But to gain access to banking services such as credit card processing and checking accounts, the Federal Reserve would need to approve the plan, an action which critics say is unlikely in the absence of a deposit insurance mandate.

One commonly cited reason for the necessity of banking, is the high volume of cash moving through retailers. Many cash-only marijuana businesses are targets for burglaries, and since the new year, there have been 49 burglaries and one robbery at marijuana businesses, according to the Denver Police Department.

In February, the Obama administration issued new law-enforcement guidelines encouraging banks to begin assisting state-licensed marijuana suppliers, even though the marijuana businesses remain illegal under federal law.

As the guidance stopped short of promising immunity to banks, most believe that little will be done until there are changes in federal law.

With so much money moving through marijuana retailers, many feel the need for high-level security in their centers. Canna Security America is one such company capitalizing on this need. From their main office in Wheat Ridge, Colo., the company monitors video surveillance and alarms from marijuana centers across the state.

Another company, Blue Line Protection Group, aims at hiring a skilled security force including former military and law enforcement officers to protect the vans transporting plants, as well as man the doors of retail facilities and areas where cash is kept.

Michael Elliott, Director of the Marijuana Industry Group does not believe the new bill will solve the banking issue and fears, “it will take someone getting shot before Congress finds a fix for the banking issue.”

What do you think about the federal policies on marijuana and banking? Tell us in the comments below.