The Trouble with Legal Marijuana: Banks

The nation’s rapidly expanding legal marijuana industry, which operates in 23 states and the District of Columbia, enters a new year facing a multibillion-dollar question: What to do with all the millions in cash it collects each week?

Nearly all of the nation’s banks refuse to take money from marijuana sales or offer basic checking or credit card services to the industry for fear they’ll be shut down by federal authorities, for whom marijuana remains an illegal narcotic. The banks won’t do business with growers, processors, retail shops and medical dispensaries, nor with their employees and contractors.

“It’s the biggest problem we have,” said Taylor West, deputy director of the National Cannabis Industry Association, many of whose 800 members are awash in $5, $10 and $20 bills and change and no bank to put them in.

The abundance of cash makes the country’s 2,000 retail shops and medical dispensaries tantalizing targets for criminals. Without bank accounts, legal marijuana businesses have a hard time paying their employees and vendors. Relying solely on cash leads to a lack of transparency in accounting and auditing, and it complicates paying the taxes that states impose on cannabis.

The problems caused by a cash-and-carry retail business likely will grow as more states move to legalize pot for medical or recreational use, unless Congress steps in and changes federal drug and drug-trafficking laws.

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