Skip to comments.Marijuana firms in cloudy haze over banking woes
Posted on 12/29/2017 6:11:20 PM PST by fluorescence
Dec 29 (Reuters) - Zach Lazarus, chief executive officer of A Green Alternative, a marijuana dispensary in San Diego, California, has lost count every time he re-opened a bank account after it was closed because of his connection to the cannabis industry.
Lazarus has had to play a game of "whack-a-mole" with banks, likening his frustrations to a popular arcade game in which a player repeatedly gets rid of something only to have it re-appear somewhere else.
Lazarus and other marijuana business owners in the $8 billion industry resort to cash-only transactions for business and to pay employees because they cannot get access to banks.
Despite making legal inroads in the United States, with California the latest state to legalize marijuana for recreational use starting Jan. 1, owners still feel the pinch.
The main problem is the classification of marijuana as a Schedule I controlled substance by the U.S. Food and Drug Administration, alongside heroin, LSD, and ecstasy - making it almost impossible to get banking services.
Banks are governed by federal laws and doing business or extending services to the firms means tougher scrutiny, often at significant costs, as banks have to do their own due diligence to prove transactions are legal.
They are required to prove that the firms are not selling to minors, funding crime groups, and not using the pretext of selling marijuana to push illegal drugs among other things (graphic).
A poll conducted by industry publication Marijuana Business Daily in 2015 showed 60 percent of the companies operating in the cannabis industry reported not even having a basic bank account
The void makes it hard for cannabis companies to conduct basic financial transactions such as deposit money, receive federal insurance or pay taxes.
(Excerpt) Read more at nasdaq.com ...
As an aside: it’s frustrating that police will use civil forfeiture against folks whose only “crime” is doing business in cash but these growers are left unmolested.
If banks can do that, then why can't a baker refuse to bake a homo wedding cake? Selective use of the law, a liberal's use of American jurisprudence.
The distribution of even a minute quantity of marijuana is still a Federal offense punishable by a year at Club Fed.
Yet one of the local dispensaries is advertising joints made from farm- fresh flowers on Limbaugh’s show.
It sounds like it's an ad slot controlled by the local affiliate rather than one controlled by Limbaugh himself.
Sure. Cost per thousand ads run on many stations. But that’s not the point. Weed has pretty clearly demonstrated a medicinal use, passing the threshold for Federal reclassification. Until that happens, we’re in a pretty schizophrenic place re: law enforcement.
So what? States are within their rightful powers under the 10th Amendment to regulate intrastate marijuana.The Swamp can GTH.
“Weed has pretty clearly demonstrated a medicinal use, passing the threshold for Federal reclassification. Until that happens, were in a pretty schizophrenic place re: law enforcement.”
The Swamp is loathe to give up its multi-billion dollar cash cow, aka the War on Drugs.
Seems they’re doing a poor enough job on coke, heroin, and pharmaceuticals that being rid of weed would focus them better. I guess the work of redistributing American wealth to cartels and tyrants is more complicated than I think. and better left to the elites.
Take a lesson from the mob, open a car wash or laundromat and launder the money through that.
Aren’t there banks which operate in only one state, and not subject to federal oversight? I assume not since these marijuana businesses have trouble getting bank accounts. But sounds like a bank business opportunity.