DENVER — Recreational marijuana shops in Colorado did an estimated $1 million in one day of business Wednesday.
And the industries nationwide are expected to generaTE $2.34 billion this year.
It’s a lot of money–much of it cash. And these new, legal businesses say that makes them nervous.
They lack access to basic banking services and they worry about safety issues that could create.
Nearly 500 customers wait hours in line opening day at 3-D Cannabis Center at 4305 Brighton Blvd. in Denver.
And Thursday, the shop turns away customers two hours before closing because they’ve run out of packaging for the pot.
“I’m sorry guys. We’ll be open at 10 (tomorrow),” says a security guard to arriving customers.
All this demand, all this cash, means serious concerns about safety.
“If we could remove the thought that we have a lot of cash on hand perhaps it would re-instill some feeling of safety or security,” says Toni Fox, the owner of 3-D.
But federal banking regulations won’t allow banks to knowingly service the marijuana industry–because pot is still considered an illegal substance by the federal government.
And banks worry about the legal consequences of accepting deposits from cannabis businesses, which might be seen as money laundering.
Credit card companies won’t help either.
So most pot shops operate with cash only.
“We all know this needs to be fixed because there is not one good reason why these businesses are not allowed to have banking accounts–only bad reasons: security concerns and accountability concerns,” says Mike Elliott with the state’s Marijuana Industry Group.
Elliott who represents the marijuana industry says cash-only businesses also have reputations for not paying all their taxes.
“I think the banking industry is not yet confident,” says U.S. Rep. Mike Coffman of Colorado.
He says there are calls to reform banking laws–but no changes yet.
Elliott says he hopes our nation’s leaders soon realize current banking laws contribute to endangering the public.
But in the meantime, 3-D Cannabis addresses safety issues by hiring private security.
“I have staff, security staff on property, 24/7. They do bank drops, things of that nature,” says Fox.
She backs that up with guard dogs, security cameras and locking mechanisms.
Elliott says about two-thirds of their members have bank accounts. But they operate under a, “Don’t Ask, Don’t Tell” policy.
Fox says she knows some pot shops have opened up LLC’S or limited liability companies under other names. But they worry if their banks find out how they make their money, they could terminate their relationships.