Guest Post: Banking Access – The Struggle Is Real for CannaBusiness Owners

By Luke Ramirez, Walking Raven LLC

Bank accounts — normally, the most basic thing a business does when starting out is start a business checking account. Those of us in the cannabis industry, however, are very well aware of the struggle to get even basic banking while openly violating federal law. It has been an issue for cannabis companies for years; NCIA’s own Taylor West recently spoke about the banking challenges cannabis companies face in a Huffington Post article, stating, “It’s the biggest problem we have.”

As an owner and operator of a retail marijuana center and cultivation warehouses, with a company, Walking Raven, which has been kicked out of more than seven banks in the last five years (including the loss of personal bank accounts), I can personally attest that this could be the most difficult part of running a cannabis company. Although there are pricey alternatives out there, the security risk of transferring and storing large amounts of cash invites crime from the criminal underworld, severely increasing your safety liability as a company. An additional burden comes with the very high cost of time it takes to manage all this cash and pay basic bills, such as power, water, and other utilities. In my company alone, we estimated a cost of over $13,000 in 2014 simply from the time it took to handle our cash.

NCIA has been an outstanding resource for myself and many other of my colleagues in tackling the banking issue. NCIA’s supportive network of other cannabis professionals has given me the advice and contacts I need to operate my business successfully, including banking. If you’re having issues with banking, I suggest that you reach out to your colleagues in NCIA for reputable ideas, or join NCIA if not already a member.

Thankfully, for the industry as a whole, the issue has been covered by the media and brought to light to the general public in much more depth in the last year since adult-use cannabis sales began on 1/1/2014; even Playboy Magazine covered the issue of banking in the cannabis industry last summer. In Colorado, Governor John Hickenlooper, who opposed the legalization of cannabis, asked the federal government to help Colorado with cannabis banking issues. In Washington State, the only other state to allow adult-use cannabis sales in 2014, the Liquor Control Board has also taken steps to help cannabis companies obtain banking, by making publicly available the sales activity of licensed growers, sellers, and processors.

Because of this exposure and the efforts of Colorado’s and Washington’s public officials, there have been major recent steps toward “above-table” banking for cannabis companies. On November 19th of last year, regulators in Colorado granted a charter to a credit union that hopes to work with cannabis companies; the union is now waiting upon an issuance of a master account number from the Federal Reserve to allow it to enter the country’s electronic banking system. In addition, there have recently been creditable solutions offered by one of NCIA’s own board members. While it is yet to be seen if these solutions are long-term, we are closer than we ever have been before to normalized banking.

While we continue to wait for a mainstream solution for every cannabis company, dispensary owners and cultivators should:

• Leverage their networks and gain contacts that can provide banking contacts. I recommend joining NCIA and taking advantage of the group’s reputable network if you have not done so already.
• Avoid any kind of activity that could be construed as money laundering and therefore put your business in serious jeopardy. This kind of activity includes lying about the nature of your business to a bank, or using your personal accounts for a large amount of business activity.
• Look into security companies that offer to handle your cash and eliminate the safety liability of using large amounts of cash. They are expensive, but may be well worth the cost for your business.
• Once you obtain banking, avoid “obvious” cannabis transactions. Use cash to pay any vendor that has an obviously cannabis-related name that you must write a check out to.
• When using cash, make sure to save all invoices, and get signed receipts from vendors and signed pay-stubs from employees; this will leave a much-needed paper trail in the event of an audit or investigation.

Luke Ramirez is owner and managing director of Walking Raven, LLC, a sustaining member of NCIA. Luke was also recently elected to NCIA’s Board of Directors. Luke has actively been in the cannabis industry since 2009. Since taking control of his company’s operations in 2011, he has changed the entire culture of the shop and successfully completed the process of converting all 3 licenses from medical to retail. Within his organization, he is responsible for all finance management, staffing, compliance reporting, marketing/inventory control, and public relations, among other things. Luke has been featured on many media outlets, such as CNBC, national CBS, and numerous local news stations. He is also actively involved in multiple cannabis trade organizations, lobbying efforts, and advocacy groups.