The decision means many pot businesses still use banking work-arounds such as paying their power bills with money orders and spritzing cash with air freshener to avoid bank detection.
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While a few 400 banks offer a few services for the cannabis industry, generally they do so at more expensive rates than credit unions.
The Fourth Corner Credit Union, a financial house created for the pot industry, has filed two lawsuits this week challenging their denied applications by the National Credit Union Administration and the U.S. Federal Reserve.
In an interview, Fourth Corner CEO Deirdra O’Gorman explained the difficulties of “head shops” operating on a cash-only basis due to a lack of a banking system.
Fourth Corner had applied with the Federal Reserve for a “master account, ‘ which is required for them to interact with other financial institutions”. It got state approval back in November and was waiting for a green light from the Federal Reserve.
“We will continue to push the federal government to allow banking for this industry”, said Colorado Gov. John Hickenlooper in his State of the State address in January.
The lawsuit says the fed’s action is detrimental to public safety, eluding to the fact that the weed industry is an all-cash business. The pot business face many problems with their expansion plans too as, even for that they have to look for investors who are willing to pay cash for a business that’s illegal under federal law.
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Indeed, it has led to a whole new industry of security firms catering to dispensaries.
