The last refuge for honest cannabusiness owners will close its doors to them soon. Colorado Springs State Bank was, until recently, the only bank in the state of Colorado to publicly do business with the medical marijuana industry. Last week, they sent out a letter to account holders in the business of alternative care requesting they close their accounts by September 30th. Understandably, this has left dispensary owners reeling.
Diane Czarkowski, of Boulder Kind Care, told the Daily Camera she thinks “a lot of people will be in a really bad position. They will be forced to do things under the radar, which is not helpful to the industry.” Banking makes it easier for businesses to keep track of their earnings and losses, of course, but this isn’t just an issue of convenience. Shutting down these accounts “empowers the black market and more cash transactions,” attorney Jessica Peck said in an interview with Westword. She estimates that Colorado Springs State Bank serviced 80 percent of Colorado’s medical marijuana industry. “There probably wasn’t a legitimate operation in Colorado that hadn’t at least talked with them.”
Banks are affected equally by federal and local law. Their reasons for dropping medical marijuana-related accounts are obvious: they could lose their licenses over illegal business. The fact remains that dispensaries, while fine with Colorado state government, are illegal in the eyes of the federal government. Medical marijuana profits are illicit money and are fairly treated as such by cautious banks.
Sadly, that doesn’t help the hundreds of dispensary owners in our state who are just hoping to do honest business. Some have suggested the possibility of a medical marijuana credit union, but there are inherent risks in that. For one, it would lack basic FDIC protections. Any bank doing business with the FDIC is required to obey federal and state laws–and although dispensaries are legal in Colorado, they are federally outlawed–meaning serving cannabusinesses is out of the question.
Austin Wulf is a freelance writer and cannabis activist. Read more of his thoughts on the pro-cannabis movement here.