Although medical marijuana is legal in California and 22 other states and recreational marijuana is legal in Colorado, Oregon, Washington and Alaska, it remains a Schedule 1 controlled substance in the eyes of the federal government. This means any bank working with a marijuana business faces prosecution. So they avoid it. The problem is how do you run a legal multi-billion dollar business without access to credit cards, checking accounts, wire transfers, savings accounts and so forth? The answer is not very easily and it’s getting worse. From a recent LATimes story:
Bags of it are taken to grocery stores to buy money orders to pay staff.
Houses are rented and filled with safes full of cash.
Phony bank accounts are created and then shut down when the money arrives reeking of pot.
Legal marijuana businesses play hide-and-seek with criminals and rely on outfits such as Helix to protect their crops and cash.
While the real answer is to take marijuana off of the Schedule 1 list, barring that the federal government could alter its rules to allow the legal industry to use banks just like every other legal business.