California’s cannabis industry has a banking problem. Federal rules keep most marijuana businesses from even opening a checking account. Many deal in cash. It’s a problem in other places with legal pot, like Colorado.
The reluctance of banks to deal with the cannabis industry is all too familiar to Tim Cullen, CEO at Colorado Harvest Company.
“I’ve had all of the business accounts closed at 14 different national banks,” Cullen said.
Lately, Cullen pays a local credit union thousands of dollars a month just for a checking account. He says it’s worth it, because he’s no longer bolting safes to the floor and bankrolling security guards.
“It really is a nightmare to try to run a business at that size with about 80 employees and five different locations and trying to pay vendors and make payroll and pay taxes all in cash,” Cullen said.
California’s treasurer has floated a public bank as an alternative for pot growers and sellers. It’s an idea Los Angeles and Oakland are also investigating. Meanwhile Hawaii and Ohio are experimenting with unique payment systems of their own for medical marijuana.