Cash-heavy marijuana industry faces banking, security challenges
Armored cars. Remote cash collection machines. Blockchain technology. A state-run marijuana bank.
All of these things are being discussed as potential solutions to a major marijuana industry challenge: a lack of banking services and an industry that is likely to be unusually cash-heavy.
“These stores can do $1 million (of business) a month,” said James Smith, an attorney and founding partner at Smith, Costello and Crawford who represents cannabis companies. “You don’t want that to be cash. … The state doesn’t want it, the industry doesn’t want it, even the federal government doesn’t want it.”
But no one has yet figured out how to prevent it. “Everyone’s trying different things, there’s no solution,” Smith said.
Massachusetts is preparing for the first legal marijuana stores to open this summer, with the licensing process beginning next month. Legal marijuana is estimated to be a $1.07 billion business in Massachusetts by 2020. But one pressing question is how does that money move around in a safe and secure way.
A spokesman for the Cannabis Control Commission, which oversees the state’s marijuana industry, said in a statement, “The Cannabis Control Commission is aware of the administrative, compliance, and public safety challenges that other states have faced in the absence of traditional banking institutions within the cannabis marketplace. We are working collaboratively with state banking and credit union associations as well as relevant sister state government agencies to explore solutions and stand up a safe, professionally managed industry.”
In today’s climate, almost no other industry does a significant amount of business in cash.
But the marijuana industry is unique. Marijuana remains illegal federally, which means federally chartered banks cannot accept marijuana money. Credit card companies also will not provide services for marijuana purchases.
Today, only one bank – Century Bank in Medford – is known