Six hundred break-ins occurred at cannabis dispensaries in the city of Denver, Colorado, within the first three years of recreational cannabis legalization due to the large amounts of cash kept on hand.
The reason for so much cash? Even though cannabis is fully legal, locally, there are still many blockades in the way of cannabis-related businesses being able to access bank accounts. With a lack of banking options available, most dispensaries are left with little to do except to keep their cash close at hand.
Much of the cash is used by these businesses to pay suppliers, employees, and taxes. The rest of it has no safe place to be stored, so it is kept in the retail stores, offices, or farms.
“There was a point where I regularly drove around with $12,000 in my glove box,” said a co-founder of HiFi Farms, Lee Henderson.
The federal government is now considering a bill named Secure And Fair Enforcement Banking Act of 2019, or SAFE for short. This bill aims to fix the banking issues of the cannabis industry. If the bill is passed, it would be the first singular piece of cannabis legislation approved by Congress.
“This is going to be one of the first times in quite a while that we actually have a congressional hearing on a standalone cannabis-related bill,” said the media relations director for the National Cannabis Industry Association, Morgan Fox.
As of now, banks are still facing blocks preventing them from allowing cannabis businesses to open accounts. These blocks include everything from the federal government attempting to dissuade banks and credit unions from serving cannabis businesses and their employees altogether to threatening ridiculous fees and legal prosecution.
The drafted legislation acquired and published by Marijuana Movement would allow banks to begin offering a wide array of services to businesses and members of the cannabis industry without fear of punishment from the federal government. These proposed services would include bank accounts, credit cards, and business loans.
The drafted legislation states that “federal regulators can’t prohibit, penalize or otherwise discourage a depository institution from providing financial services to a cannabis-related legitimate business.”
For many participants of the legal cannabis industry, this news couldn’t be more welcomed.
“I’ve been through… three or four personal bank accounts in 4 1/2 years,” explained Henderson.
All of his employees have lost their personal bank accounts due to being employed by the cannabis industry.
“It was troubling. If you have your credit card tied to your Chase account, and then suddenly you have to pay that off in 72 hours,” said Henderson.
However, the impacts of the banking issue, go much further than being denied or losing banking privileges; they also include burglary and armed robbery.
“There’s literally people robbing delivery trucks because they know they’re bringing the product and coming back out with the money,” said a central California grower named Mitch Davis.
This was clearly seen in a string of store-to-home cannabis delivery driver robberies early this month in the San Francisco Bay Area.
“In a few robberies that we have, they’ve targeted cash and not even touched the marijuana,” a police Lt. of Concord, California, Mike Kindorf, recently told KRON.
Davis went on to point out that in a normal business model, customers would have the ability to transfer funds electronically, rather than having to deal strictly with cash.
However, dispensaries are often the bigger target of criminals. This is because most of them don’t have systems in place to be able to accept electronic forms of currency. This issue is leading to more and more robberies.
The American Bankers Association is stepping into this chaotic scene, pushing on Capitol Hill for banking reforms regarding the growing cannabis industry. The large amounts of cash lying around is perhaps the most significant reason behind their interest.
The last cannabis banking legislation introduced into Congress never made it to a hearing regardless that it received over 100 co-sponsors in the House and Senate.
“I’ve worked on this for years all over the country. Nobody thinks it’s a good idea to prohibit them from having banking services,” said Earl Blumenauer, a Democratic representative of Oregon who’s been pushing for the legalization of cannabis for longer than most lawmakers on Capitol Hill. He also believes that President Trump would approve cannabis legalization if a bill made it to his desk.
Last fall, Blumenauer introduced a comprehensive plan for Congress outlining steps that would push the federal government towards the full legalization of cannabis. According to this plan, full legalization could happen as soon as 2019.
In Blumenauer’s view, passing banking reform is one step forward and, more than likely is as close to federal legalization as we are going to get.
Also according to Blumenauer, perhaps the most significant reason federal laws on cannabis haven’t been reformed is due to the past eight years of Republicans leading key committees. Now, as a Democratic leader with bipartisan support, he isn’t worried about Republican lead executive branch and believes change is possible.
“Donald Trump I don’t think actually cares about this. I think ultimately the administration will approve if not try and run to the front of it. If the train starts moving, somebody might want to get ahead of the party,” said Blumenauer, pointing out the president’s support of state’s rights regarding the legalization of cannabis.
On another note, advocates of cannabis legalization recently raised doubts about the voice opposition at a hearing for the SAFE Banking Act. The act would make things easier for banks to work with businesses operating in the cannabis industry.
The voice of opposition, which belonged to a lawyer employed by Nelson Mullins, Johnathan Talcott, was hired to represent WeedMaps between September 2017 through December 2018. During the last quarter of 2018, Nelson Mullins was paid $50,000 to lobby for its interests in the cannabis industry which included banking legislation.
However, at the SAFE Banking Act hearing on Capitol Hill, Talcott spoke from his position of chairman at Project SAM, a pro-decriminalization organization that strongly opposes federal legalization of cannabis.
“Mr. Talcott is a hypocrite of the worst kind,” Justin Strekal, director of policy with NORML said.
In response, Talcott stated, “I don’t take any money from the pot industry. In fact, if I really wanted to make a lot of money I wouldn’t be standing here right now.”
Talcott’s association with WeedMaps was discovered via conversations with multiple cannabis advocates and lobbyists attending the recent hearing. Talcott himself confirmed his connection with Nelson Mullins; he can also be found on the firm’s website. WeedMaps also confirmed their previous connection with Nelson Mullins.
This association has gotten pro-cannabis advocates who’ve been combating Talcott on the issue all fired up.
“He believes in his position enough to be here and testify in Congress, but he works for a firm whose clients oppose what he’s testifying to. Anybody with a shred of integrity would just leave, it’s that simple,” said Director of Federal Policies at the Marijuana Policy Project, Don Murphy.
Talcott claims that the money from Nelson Mullins didn’t benefit himself.
“We have 800 lawyers and a lot of different conflicts of interest,” said Talcott, going on to explain that executives at Nelson Mullins would divert money coming from a conflicting party away from him upon his request. However, he didn’t make clear if he had requested such a thing for the funds received from WeedMaps by Nelson Mullin over the past couple of years, which totals $310,000.
Talcott also added that Project SAM doesn’t take money from the cannabis, pharmaceutical, or tobacco industries.
Murphy, who has opposes Talcott on television, regarding the legalization of cannabis, disagrees that dispersion of money within a firm can’t be so clean.
“I mean, you know, who pays for the HVAC and the rent and all the other things?” Murphy asked.
“But you know,” he went on, “if this is the best the opposition can do — to get a guy this conflicted to sit in Congress, to stand before Congress, and oppose our position — they don’t have much. They didn’t bring a doctor, they didn’t bring a scientist, they brought a hack.”