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Colorado medical marijuana faces more banking hurdles

Susan Ladika

Imagine if your neighborhood pharmacy could only accept cash because it wasn’t allowed to open a checking account and had to pay exorbitant fees on credit card transactions. Same with your favorite spa or local health food store.

All perfectly legitimate businesses. All coping with an unending string of banking bad dreams.

That’s what medical marijuana dispensaries in Colorado have repeatedly faced. Colorado voters legalized the use of marijuana for medical purposes in 2000, and since that time, dispensaries have flourished. But as I reported in April, while a few entrepreneurs have seen opportunities in providing financial services to the budding industry, for the most part, traditional bankers have shunned medical marijuana providers.

Diane Czarkowski, an owner of Boulder Kind Care, has had financial institutions pull the plug on her bank account more than a half-dozen times since the business was launched two years ago.

medical-marijuana-card.jpg

Now, according to reports in the Boulder (Colo.) Daily Camera and Denver Westword, the very last bank in the state openly doing business with medical marijuana sellers, Colorado Springs State Bank, has sent a letter to medical marijuana account holders telling them to close their accounts by the end of September.

That left Boulder Kind Care and other marijuana dispensaries scrambling to find a new provider to process their checks and credit card transactions.

While Czarkowski has found another bank that will open a checking account for Boulder Kind Care, she’s still wading through the possible companies that will process credit cards — and not charge outrageous fees.

She says Boulder Kind Care caters to an “older client base,” and about one-third pay for their purchases with credit and debit cards.

While the concept of pulling out your plastic to pay for pot may leave people in most of the country shaking their heads, in a handful of states, medical marijuana dispensaries are just as legal as CVS or Whole Foods.

But trying telling that to the feds and the financial types.

The key stumbling block is the disconnect between federal and state marijuana laws. While 17 states and the District of Columbia have legalized marijuana for medical use, the U.S. Drug Enforcement Agency classifies cannabis as a Schedule 1 drug, with a high potential for abuse and no currently accepted medical use, according to the lobbying group NORML (the National Organization for the Reform of Marijuana Laws).

“There are unresolved issues with regulations, law enforcement and other
agencies that need to get resolved before the industry can progress and become
bankable,” John Whitten, senior vice president of Colorado Springs State
Bank, told the Daily Camera.

Czarkowski thinks the lack of legitimate banking will push some in her industry to fly under the financial radar. That’s a shame, she says, because the paper trail created by allowing customers to use credit rather than cash makes it “harder for unethical businesses to hide.”

One idea now being kicked around, says attorney Jessica Peck, is to serve the industry by launching its own credit union.

May we suggest a name?

Rocky Mountain High CU.

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  • It’s sad and that’s why we want to help as many Dispensaries by providing free advertising. The banks even shut us down so what are we supposed to do?

  • malcolm kyle

    Prohibition does nothing but bankroll dangerous criminals, corrupt whole law enforcement agencies and generously arm international terrorists. Alcohol prohibition (1919-1933) was a casebook example of such dangerous folly. Today, alcohol is taxed and regulated and the shoot-outs over turf and the killing of innocent bystanders are no longer a daily part of the alcohol trade. So how come so many of us lack the simple ability to learn from such an important historical lesson, and are instead intent on perpetuating the madness and misery that prohibition has always invariably engendered?
    It is clearly our always-doomed-to-fail policy of prohibition that is causing this intense misery. We need to fix ourselves (start thinking clearly) and in doing so, we will not only help rid ourselves of this terrible self-inflicted curse but also help to heal the whole planet.
    Are we really such an adolescent nation that we can expect neither maturity nor cognitive thought from either our leaders or our populace? This is not a war on drugs; it’s an outright war on sanity!
    Colombia, Peru, Mexico or Afghanistan, with their coca leaves, marijuana buds or their poppy sap, are not igniting temptation in the minds of poor weak American citizens. These countries are merely responding to the enormous demand that comes from within our own borders. Invading or destroying those countries, creating more hate, violence, instability, injustice and corruption, will not fix this problem. We need to admit that It is ourselves who are sick. Prohibition is neither a sane nor a safe approach. Left unabated, its devouring inferno will surely engulf every last one of us!

  • Mike Dovan

    The whole thing is ridiculous. We voted on that and it passed. You would think that some private banks would at least see the financial gain of processing those transactions.

  • Dave P

    HI EVERY ONE THAT SMOKES THE PRICES NEED TO COME DOWN SOME BECAUSE SOME OF US NEED IT TO HELP FOR OUR PAIN OF WHAT OTHER MEDS WON’T DO FOR US.I HAVE BEEN SMOKING IT FOR 30 ODD YRS NOW AND I DO ME GOOD TO BE ON IT BUT THE PRICE IS TO HIGH.THE BANKS SHOULD KNOW THAT THAY CAME MAKE MONEY ON YOUR MONEY AND THE GOVERNMENT IS TOO.THE TIME IS NOW FOR US HAVE THE RIGHT.THE TIME IS HERE. THANK YOU. SMILE AND BE COOL.

  • Bo Belinsky