Jan 24, 2014 8:46 PM by Maddie Garrett
New Laws Could Allow Banks to Do Business with Marijuana Sellers
Whether it’s medical or recreational, marijuana sales are up in Colorado. But when it comes to paying for your pot, it can get complicated and some businesses who take plastic, could be breaking the law.
Attorney General Eric Holder just announced that the Obama administration is working on new banking regulations that would allow banks to do business with marijuana sellers. But until then, marijuana businesses can’t have a bank account or process credit cards.
At Tom McMenamin’s medical marijuana shop, Levity Wellness, of which he’s a co-owner, they take cash only.
“Since it’s federally illegal and FDIC insurance is a federal program, and most banks are federally chartered, we can’t have a bank account,” explained McMenamin.
McMenamin and his business partners tried setting up credit card processing, but after four banks dropped them over the course of four years, they gave up on that.
“The last time… they basically sent us a letter saying we don’t have to give you a reason, your account’s being closed at the end of the month,” said McMenamin.
Those kinds of hurdles make running a small business difficult.
“Much more difficult than I ever thought it would be to run a business, to pay our taxes,” McMenamin said.
This problem of not being able to have a bank account, or run credit cards, is plaguing marijuana shops across Colorado.
“Just trying to pay taxes and our employees as many other businesses do and it’d be nice to deposit our money regularly and run credit cards,” said Andy Betts, General Manager at Denver Relief.
Some marijuana shops have found at least one alternative, running ATM and debit cards as an ATM transaction using a customer’s PIN number. Betts said they started this at their medical marijuana dispensary a few years ago and it has helped business.
“A lot of people just don’t like to carry cash so it’s helped immensely in that regard,” he said.
But there are marijuana businesses out there that do accept and process regular credit cards. Chris Mills, CEO of Greenhouse Payment Solutions LLC, said some of those businesses might be flying under the radar and doing it illegally.
“There are some businesses that have credit card processing but they’ve been miscoded by their sales reps and it’s usually a matter of time before they get shut down,” said Mills.
News 5 wanted to know how some of the local marijuana shops take payment for their products. After calling dozens of MMJ shops in Colorado Springs, 11 business said they are cash only, five accept credit cards and three wouldn’t tell News 5 their payment methods.
In Pueblo there are only two retail shops, one is cash only. The other, Marisol Therapeutics, accepts credit cards but the owner would not talk to News 5 about how they take cards.
“Good for them, I’m glad they’re still able to do it, I wish we could, it’s cost us a lot of money,” said McMenamin about the other businesses who take cards.
While some credit card companies are relaxing on their policies when it comes to marijuana transactions, it’s the federal banking regulations that haven’t been changed. And that’s what businesses are waiting for in order to change their policies.
In the meantime, customers making the purchases won’t get in trouble for using their cards, it’s the processor or the company itself that could.