The legal marijuana industry’s banking issues aren’t as sexy as its problems with infused edibles and its sky-high sales numbers — until you think about how these business owners, who often don’t have bank accounts, transport and store these large boxes and duffels of cash.
Check out the lead to Eric Gorski’s excellent June 2014 piece on Colorado pot shop Medicine Man’s banking issues:
The former Marine and the former sheriff’s officer are on a low-key mission. They left the body armor and assault-style rifles back at the office. Their black SUV — it has to be black, right? — blends into the midday traffic barreling west through the city on Interstate 70. When you’re carrying $122,000 in cash stuffed in a blue tote bag that smells like marijuana, the less conspicuous the better.
“Right now, we’re like any other vehicle on the road,” says Phil Baca, the ex-sheriff’s officer, checking his rearview mirror to make sure they aren’t being tailed. “You’d never think there was a bunch of money in it.”
Suddenly banking, a dry, somewhat difficult-to-understand issue for the average pot shop visitor, sounds more like a Hollywood thriller.
More on pot banking
Legal businesses can’t keep bank accounts open, and so they hire well-armed security firms to help them transport cash to different places — to deliver their monthly tax revenue to the state of Colorado, as they did above in Gorski’s story, or to an undisclosed location where they’re storing hundreds of thousands of dollars, or millions even, until they have a safer place to put their stinky bundles of cash.
You can feel the weight and impending danger in Gorski’s pot banking story, but you can see all that in “Guns, Drugs and Money,” a new 10-minute video from The New York Times.
“There’s been a few publicized instances of robberies,” Andrew Freedman, the man in charge of coordinating Colorado’s policy efforts on marijuana legalization, says in The Times’ video. “Fortunately nothing’s gotten violent yet, but we’re kind of asking for it.”
Moving cash from his shop to an undisclosed location in the new video is Dylan Donaldson, owner of Boulder’s Karing Kind pot shop. He’s had 12 bank accounts in recent years, and they were all shut down, he said. From The Times’ story that accompanies the video:
He has nine 1,000-pound safes bolted to the floor in the back of Karing Kind, the dispensary he owns in North Boulder. At any given time, they hold $80,000 to $100,000 in cash.
The safes didn’t help, though, when audacious thieves busted through the wall of an adjoining business in the middle of the night in June and took $250,000 in marijuana plants.
Now he pays $100,000 a year for armed guards provided by Iron Protection Group, a business owned and operated by vets from Iraq and Afghanistan, who watch the place at night. They also deliver money to the tax office and vendors, from makers of THC concentrate to suppliers of computer paper.
“It’s a nightmare,” Donaldson says in the video, “and we live it every day.”