It’s not often that you hear of a bank or credit union turning down cash deposits. The banking world is renowned for its perceived greediness and willingness to engage in shady dealings, insider trading and fraud, but in states like Washington and Colorado, where marijuana dispensaries are now legal, money is being turned away by the bag.
While banks have a legitimate fear of engaging in business with legal marijuana businesses on account of federal rulings labeling marijuana as a Schedule I drug — up there with heroin and LSD — risk is the nature of capitalism, and the marijuana vendors should be able to find a safe place to deposit their cash in the banking system.
Legal marijuana businesses like Ryan Kunkel’s in Seattle are being crippled by their inability to open and maintain bank accounts. Running a cash business may provide exclusivity and mystique, but, in reality, it is both difficult and dangerous to maintain a business worth hundreds of thousands of dollars exclusively in cash — hoarding mounds of cash makes businesses more susceptible to theft. By having a bank account or other access to banking systems — like an ATM that operates on debit transfers — these businesses are able to function in a more competitive environment without severely risking their employees or their capital.
These risks make the high demand business of marijuana distribution much less lucrative and desirable. Being treated like criminals hardly sends the right message for legalization, and it’s a message that needs to change. Legal marijuana distributors like Kunkel live in a capitalist country, and it is odd and outlandish for them to be denied banking opportunities. Have these banks never heard of risk investments?
They aren’t demanding capital, loans or lines of credit that would necessitate some form of credibility; they are simply trying to deposit huge sums of cash. These banks clearly don’t understand the purpose of banking if they’re turning down such large quantities of legitimate money.
Hopefully, the federal government will recognize the legitimacy of the businesses like individual states have. Without federal approval, legitimacy is a rapidly self-distancing object that is just out of reach for legal marijuana dispensaries, something that is certainly holding them back from expansion and complete control of their businesses.