We need your input. Please review the information below and let us know your thoughts by sending us an email to email@example.com. Your email can be anonymous. Just caption the email “The Banking Dilemma.”
The Inconveniences You’re Faced With:
Are you an MMMA registered caregiver who is forced to deal only in cash? Do you pay the business landlord in $100 bills? Do you pay the utility and transportation expenses with cash or hide them under a personal checking account or a credit card? Do you carefully keep the source of your funds for such payments hidden from that credit card company or the bank because you do not want them to know it’s from marijuana? Will they put an end to your ability to use that system for payment if they know your business?
Banks Want Money, But Can’t Take The Risk
How do we get out of this dilemma and utilize the banking system to pay normal business expenses and deposit the generated income? How do we pay the taxes which are due to the state and federal agencies in a way other than in cash? The banking system will change immediately if marijuana is removed from the Schedules of the federal Controlled Substances Act. At that point, every bank, financial institution and credit card company will want your money. They want it now but it comes, they believe, with risks which their shareholders are not willing to accept. Can you imagine if a large bank knowingly accepted marijuana money as deposits and that bank started clearing checks for expenses? They might have to report that to the SEC and risk the price of their stock plummeting. The time will come though.
At CannalexLaw we have been discussing with some Michigan financial institutions the idea that the regulatory filings associated with the MMMA deposits and related payments are worth the risk. There is a tremendous cash economy out there that they can now capture. What bankers ask us is:
- If they go through the trouble and take the risk, are there enough people who would utilize their services? That’s a practical one for the bankers – no sense gearing up to take in the marijuana money and pay the bills for the MMMA registered caregivers if there are not enough caregivers who are willing to use banking services.
We hear lots of complaints from caregivers but need to know you would switch from all cash transactions so we can continue discussions with these various financial institutions to find the solution. If you are reading this and are looking for a Michigan financial institution to assist your legal marijuana business, please notify us so that we can tell these financial institutions of your interest in their services. If there’s enough positive response, we may convince one or to step into the gap, put their toe in the water so to speak, and help the MMMA industry while they help themselves.
There is no doubt the financial institutions will need to charge more in fees and costs for servicing MMMA business-related accounts. There is more paperwork and risk!
Let us know if you are willing so we can pass on responses to the financial institutions as we continue talking with them. If you are opposed and would not, let us know that too so we can get a fair gauge of willingness to continue with the existing system or to change.