DISPENSARY-FRIENDLY BANK

The See Change study, which surveyed 300 wholesale and retail dispensary operators, said 24 percent reported that obtaining financing was their biggest worry.

Charles Mannon, president of the Savings Bank of Mendocino County, said he believes federal regulators hit his northern California bank with an enforcement action because the region is flush with medical-marijuana proceeds. The Federal Deposit Insurance Corporation said the bank had a weak anti-money laundering program, and the bank this year signed a legal agreement to tighten procedures.

“They just wanted to make sure that we do everything we’re required to do to trace money laundering. They never specifically said anything about medical marijuana, but I think we were targeted because we are in a medical marijuana growing area,” Mannon told Thomson Reuters.

Mannon said his bank is not seeking to cull medical marijuana dispensaries, but instead is closely monitoring “all accounts with lots of cash.”

FDIC spokesman Greg Hernandez said the regulator has not put out “specific guidance” on medical marijuana businesses.

In Denver, Harank said the banks that rejected her said they had taken on too many medical pot businesses and that had “put them on the radar” of federal authorities.

Now, Harank’s company has an account at CSSB Private Bank, a Colorado-based division of Texas-based Herring Bank, which she said is the only bank “openly” doing business with medical marijuana outfits.

Dustin Fisher, the vice-president for business development at CSSB, said it was created to cater to the medical marijuana industry and is planning to expand to other states. He did not elaborate.

Regulatory consultant and investigator Jim Dowling, a former federal agent, said his advice to banks is that they avoid medical marijuana dispensaries. He said they sometimes masquerade as other types of businesses to obtain accounts.

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By Brett Wolf
Thomson Reuters Accelus