eighteen months, ever since the day Mr. Pink had opened an account for our company and wired in our first big infusion of seed money.
From the beginning, we had been completely transparent about our business plans. My attorney had urged me to be âopen and notorious.â From day one I had followed a piece of similar advice proffered by my accountant: âIf youâre serious about getting into the legal marijuana business, donât hide a damned thing. Make it completely clear to everyone you meet that this is what you do. You donât ever want anyone to come back later and say you lied to them.â
Our banker knew what we did for living. That was what made this conversation so awful for him. Heâd been fine with our business for more than a year. Now he was not so fine anymore.
âYou guys are great clients,â he said. âBut we can no longer service your account.â
âService?â
âWe cannot continue to have your account here at this bank.â
âThis branch, or the whole bank?â
âThe whole bank.â
âOh,â I said, âYouâre kicking us out.â
âNo,â he said. âThatâs not strictly true. My advice is to use the money thatâs in the account right now. But you will not be able to make any more deposits. When the moneyâs used up, weâll close the account.â The bank also sent us a nice letter spelling out these terms and stating our undesirability as clients. I saved it as a souvenir.
Why was this happening? Because, according to federal banking law, we were drug dealers, of course.
See, back when Mr. Pink opened the account, the bank managers had assumed that if a depositor was legal and licensed by the state of Colorado, that depositor was welcome as a customer. After all, no one wants to do business with illegal drug dealers, right? Legal drug dealers were on the up-and-up.
But as word trickled from the Colorado bank to its board of directors and risk mitigation committees, the powers that be had carefully considered the corporationâs position and nixed the idea of legal marijuana business checking accounts.
The reason made sense; it just didnât bode well for anyone we knew in the cannabis industry. Regardless of whether a bank is headquartered in a weed-friendly state or not, it is a federal institution. In order to be part of the Federal Deposit Insurance Corporation program that insures all accounts, U.S. banks must play ball with the federal government. And growing and selling marijuana is still a federal crime. Our bank reasoned that it would lose its charter or be criminally prosecuted if the federal government learned that it was doing business with drug dealers. So our bank had made the decision to show us the door.
We could live with the decision, and we did exactly as the manager suggested. When we spent our last dime, we closed the account and opened another at a local bank. We were completely up front about our business, and the new bank didnât give us any troubleâthen.
That relationship lasted a year before the second bank kicked us out.
The same angst, the same awkwardness, the same uncomfortable banker look, the same damn form letter. I kept that one, too.
Around the same time, another local bank in Denver announced that it was offering commercial marijuana checking accounts. To bank there, all you needed to do was show that you were a state-licensed marijuana dealer.
Great, we thought. Itâs about time someone figured out a way to make this work. We rushed over and opened our third account. We were not the only ones. It seemed as if every grower or dispensary owner in the city had gravitated here. We were all so grateful to have finally found a home. But we should have seen it coming. Sooner or later, someone at headquarters connected the dots and realized that the bank was leaving itself open to federal prosecution. When that happened, we were out on
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