Legal marijuana’s only solution to its banking crisis is an act of Congress, bank and industry experts say, one that will let Colorado’s newest and hottest business sector handle its finances like all others.
Speaking Thursday at the first Cannabis Capital Summit, sponsored by the typically conservative Rockies Venture Club, industry leaders said efforts to legitimize the relationship between banks and marijuana businesses isn’t the same as legalizing it.
“Put simply, these are businesses that very much want and need a banking relationship, but will continue to press on and succeed even without one,” said Michael Elliott, executive director of the Marijuana Industry Group, during a panel discussion about banking issues.
The first summit was a day-long, standing-room-only gathering at Mile High Station, whose location near the stadium is an echo of the subject matter’s dark past — tucked into a corner of the city, under a highway overpass, rather than in downtown’s mainstream.
Nevertheless, venture capitalists swarmed the event, eager to hear industry insiders offer tips, pitches and insight to the multimillion-dollar business that is cannabis and hemp.
Pitches ranged from a commodity exchange for cannabis-related products — much like the corn, soy and pork-belly futures markets work — to a seed-growing operation for a genetically modified product.
“This is more successful than I had hoped,” Rockies Venture Club executive director Peter Adams said, noting more than 300 registrants came from as far away as Alaska and Florida.
“Investors are saying it’s legal and they’re all in,” Adams said. “They’re treating it like the dot-coms, where some will succeed wildly and others will not.”
The tell-tale was a pitch by a cannabis industry supplier that attracted a lot of investor interest at a monthly club meeting earlier this year.
“So much so, one member who missed the meeting made sure not to miss the opportunity and left a $50,000 check under the doormat of my home,” Adams mused. “That’s when I knew we needed to explore this more.”
One of the summit’s keynote speakers, Troy Dayton of ArcView Group, a San Francisco angel-investment firm whose members fund cannabis-related projects and businesses, said businessmen and women in the legalized industry are in a better position to impact politics.
“To change the world, there’s no need to select one or the other,” he said. “But when you’re choosing between prison and regulation, regulation looks pretty good.”
Politics is what bankers said will be required to change federal laws that keep marijuana illegal and, as such, a headache for them to bank its dispensaries and growers.
“It will take an act of Congress to change things,” said Alan Peppers, president and CEO of Westerra Credit Union. “The way it is now, it’s simply insufficient for us to knowingly bank the sector.”
New legislation in Colorado that would create a credit-union-like cooperative for marijuana businesses to work within is unlikely to gain the federal approval it needs, Colorado Bankers Association CEO Don Childears told attendees.
“As long as it remains illegal under federal law, it cannot be banked legally,” he said.