IS IT TRUE THAT POT BUSINESSES still cannot get bank accounts? What do people do?
IT IS MOSTLY TRUE. And people do all sorts of interesting things. The situation feels intractable despite the fact that several banks and credit unions want to work with marijuana businesses and are not shy about saying so. Like most legal hurdles in the marijuana industry, the problem is the illegal status of pot under federal law.
The banking conundrum got press again when Colorado’s Fourth Corner Credit Union recently lost its long-shot lawsuit against the Federal Reserve Bank, which refused to grant the state-chartered credit union a “master account” to serve pot clients. Fourth Corner made the usual legal and policy arguments, in and out of court, including that “in 2016, $1.2 billion in cash will be transacted by the cannabis industry in Colorado. That’s all in $20 bills. At some point somebody will die. And then we will be allowed to bank.”
Most of us anticipated that Fourth Corner would lose. The judge was nice about it, but determined that “courts cannot use equitable powers to issue an order that would facilitate criminal activity.” The judge also stated, “I regard the situation as untenable and hope that it will soon be addressed and resolved by Congress.” Given President Barack Obama’s near lame duck status and a bunch of other factors, I am skeptical this will happen in 2016.