Marijuana businesses in Oregon still lack for banking services, a situation unlikely to change for another five to 10 years, according to comments Thursday at a panel discussion in Bend.
Michael Hayes, one of three panelists and owner of Miracle Greens, a retail marijuana shop on SE Third Street, Bend, declined, when asked by an audience member, to say whether he has a business bank account.
“The only reason I would, if I did, is the federal government requires me to pay my taxes online,” he said during the hourlong discussion at the Bend Park & Recreation District Office on SW Columbia Street. The Risk Management Association, East Cascades Chapter, sponsored the lunchtime discussion, which drew about 50 people.
“I’m perfectly fine holding cash all day long,” Hayes said. “I’m still honest. I still do all the accounting, it’s just cash. It’s just not in a bank’s hands, where it could be earning interest. It’s just collecting dust.”
As many as 70 percent of the marijuana businesses in Oregon go without banking services, said Jennifer Clifton, a panelist and Bend attorney who provides legal services to cannabis businesses.
“This is a huge industry and it continues to grow,” she said. “Projections are by 2020 that this industry is going to be (worth) about $20 billion (nationwide). So this issue of finding somewhere to bank the money isn’t going to go away.”
Cannabis is legal in Oregon, but under federal law it is considered an illegal drug with no medical value and a high potential for abuse. Federally chartered banks are prohibited from handling money that comes from illegal drug transactions. The Obama administration created a set of rules for states where marijuana is legal that allowed banks to provide loans, accounts and other services to legal marijuana businesses. Banks must still adhere to requirements for reporting activity that could be related to drug trafficking or money laundering.
Many banks decline to provide services to cannabis business because of the risk of change in federal policy but also because of the cost in time and money required to complete those quarterly suspicious activity reports.
“I have a responsibility to know if there’s any illegal activity, if their taxes are being paid, if all that’s going on,” said one banker in the audience. “I just don’t want to have that level of scrutiny (on the bank) going forward.”
Bankers and real estate brokers in the audience asked if money that results from a legal drug transaction in Oregon is always considered tainted under federal law.
“Is rent money that comes from the cannabis industry, is that drug money?” asked Chris Telfer, the panel moderator, a certified public accountant and former state legislator. “And what I’m hearing is banks don’t quite know.”
Otherwise, cannabis businesses could be considered a wise investment. Amanda Borup, panelist and policy analyst for the OLCC Recreational Marijuana Program, said the Oregon Liquor Control Commission, for example, requires anyone with an ownership interest of 10 percent or greater to submit to a background check. The state also requires on-site security at cannabis businesses, including 24-hour camera surveillance.
Hayes, who also owned several bars, said he’d much rather be in the marijuana business than the alcohol business.
“The risk is really not there,” he said. “If you just look at us as a general cannabis industry and stereotype us, that’s kinda sad.”
— Reporter: 541-617-7815, firstname.lastname@example.org