4 Investigates: Most banks refuse to work with marijuana industry
July 30, 2019 08:38 PM
ALBUQUERQUE, N.M.- When New Mexico legalized the medical cannabis program in 2007, the state's law was immediately at odds with federal laws on marijuana.
“Cannabis is a schedule-one drug according to the federal government,” said Paul Stull, president and CEO at the Credit Union Association of New Mexico. “That is the most serious type of drug that they regulate.”
As the medical marijuana industry grew, and dispensaries like Purlife started popping up around the state, a big, sinister problem developed. There were questions about what to do with all the money.
“This is a very serious public safety issue,” Stull said. “In New Mexico, there are millions of dollars in cash flying around every week, in backpacks, in duffel bags and storage units even.”
Banks are regulated by the federal government. The Justice Department can criminally charge a bank that receives money from marijuana sales.
“The fact that there is cash flying around also invites criminal activity and with more criminal activity, we see more violence,” Stull asserted. “Our communities need protection against criminal activity and not having the ability to bank legal cannabis sales only contributes to that.”
The problem extends beyond New Mexico. In Nevada, where the state legalized recreational marijuana in 2017, stores have been robbed at alarming rates.
One organized heist led to a police shooting.
In New Mexico, only one of the 70+ financial institutions operating in the state will consider working with marijuana companies.
Darren White, CEO of Purlife, uses that bank. But he said his cash deposits come with risks and worries.
“It's a cash business and from a public safety perspective, I have no idea what we do, not just for the sake of securing the money, but how do you pay your employees, how do you pay your bills,” White said.
Stull visited Capitol Hill this year, lobbying for the secure and fair enforcement banking act.
“I think the members of Congress need to wake up and understand that they are out of sync with states,” he said. “With 33 states providing legal access to cannabis, the federal government is completely out of sync.”
The legislation would allow banks to work with recreational and medicinal marijuana companies that are operating in states that have approved the legal sale of pot.
After going through its first hearing in the Senate, many senators appeared understand the dangers posed by a cash-only business.
“Let me talk from a public safety perspective, one in every two cannabis dispensaries were robbed or burglarized with the average thief walking away from $20,000-$50,000 in a single theft,” said Sen. Catherine Cortez Masto, a Democrat from Nevada.
While the bill makes its way through Congress, White is holding out hope it will eventually pass.
“Right now, what we really want is the comfort and stability to know that tomorrow morning, we have a place to do banking,” White said. “For us, that's the most we can ask for.”
Updated: July 30, 2019 08:38 PM
Created: July 29, 2019 09:29 PM
Copyright 2019 KOB-TV LLC, a Hubbard Broadcasting Company. All rights reserved