If medical marijuana rolls out in November, people with legal businesses related to pot will be living like they're in Breaking Bad. Until weed is legal on a federal level, it's not going to be easy for people to stick their profits from the biz into a Wells Fargo. Instead, they'll be stuck keeping tons of cash under the floorboards.
Sally Kent, a marijuana lawyer who practices in Colorado and Florida, says this legal lag poses a huge security risk.
"If you know someone's holding hundreds of thousands of dollars, they become a target for theft," she says. "People know that they aren't allowed to use a bank, so they can stake you out." She cites a crime ring in her state where people planned to do just that -- robbing people who were transporting money from so-called illicit businesses. Luckily for the entrepreneurs, the cops stopped the plan before it was carried out.
What happens in Florida will probably mirror what has happened in states where marijuana is already legal, like Colorado. In the Centennial State, it just became legal for banks to accept business from people who make their money slinging weed -- with many restrictions.
On February 14, the Financial Crimes Enforcement Network issued a letter of guidance to banks there that laid out exactly what to do if a marijuana client came to them. Basically, a bank is required to submit a report that says the business is illicit. According to Kent, the lawyer, this is too much of a hoop for banks to jump through. She says that although banks have been given the go-ahead to work with marijuana businesses, they're extremely reluctant to do so.
"The guidance absolutely spooked banks even more," she says. "It laid out all the levels of due diligence required of them."
So in May, Colorado passed a bill that would allow for state-run banks. These co-ops would deal exclusively with medical marijuana businesses.
It's unclear how long it would take Florida to come up with such a banking system. Medical marijuana was first legalized in Colorado 14 years ago, and the state is just now catching up to the glaring omission of keeping a legal business from having the right to bank.
And if you're trying to get a loan to start a medical marijuana business -- good luck. You'll be like Don Cheadle at the end of Boogie Nights, trying to get help with his stereo store and getting denied because he used to work in porn. Even with all the federal strangleholds, banks are still private businesses that can deny loans for pretty much any subjective, pearl-clutching reason.
Send your story tips to the author, Allie Conti.
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