Can I have a marijuana business account at my bank?

Okay, if you ran an all-cash business, would you feel the need for a bank? Not really, chime in my dealer friends. On this level of transactions, cash changes hands quite quickly. Wrinkled $20s rule this nest, most hundred dollar transactions use $20s. Although, the $100 bills were incredibly crispy and fresh. But what if you had legit medical cannabis practice? Would you feel the need for a safe place to deposit your funds? Perhaps somewhere the money could work for you like any kind of interest-bearing account?

Well don’t look to your neighborhood Wells Fargo, or Bank of America. They ain’t touching your funds with a $10,000 bill. According to most industry standards, the risk-to-profit ratio for most banks is too high in the risk column. Even though you know they are looking at this $5.4 billion dollar industry in 2015 and licking their chops.

But as long as cannabis remains on Schedule 1, the federal authorities won’t sanction any marijuana-related businesses. And because the feds won’t move cannabis to a lower Schedule, the courts won’t sanction master accounts, which allow full insurance of the deposited funds and other uses of the money. In other words, the feds won’t allow cannabis proceeds into the United States banking system because feds are slow to react to changes and there’s an entrenched attitude about “drug proceeds.” Even if legal.

The solution to this infuriating Catch-22 situation? One would be the rescheduling of cannabis to Schedule 2. Then the feds should make it clear that marijuana-based accounts are just like any other business entity. The banking facility could, then, set up master accounts which would then allow perks like loans, investment and expansion of the business, and safe storage of their profits. Most safety-aware cannabusinesses have cash pick-ups during the day by armed courier for their deposits.

Where’s the money going?

Well, all we can tell you is that about 40 percent of businesses have relationships with banks for their deposits. Understandably, not one would talk about who is helping them process their profits. The federal arm that fights money laundering wrote that 266 depository institutions currently maintain marijuana-related businesses (MRB). The few publicly known examples typically involve small banks or credit unions who determine that this is a banking risk they will take.

Minimizing risk

One way to get banks on board is the “seed-to-sell” software that is available on the market. Audits and accountability are big in the banking world and there are software packages that will monitor a plant from seed to blossoming, a highly coveted oversight that should offer some security to banking institutions. As technology becomes cheaper, look for the banks to begin to step into this burgeoning industry.