A great way to be treated like a criminal is to act like one. And one way to act suspiciously is to deal entirely in cash — large amounts of it, for all of your daily transactions.
So if marijuana is a billion-dollar industry in California, like they say, it's a billion dollars in cold, hard cash.
Dealing in cash has been the lot of all legal weed enterprises in the United States — because the federal government says so.
Beginning in 2010, dispensaries, cultivators, and weed entrepreneurs saw their bank accounts, 401(K)s,
and other financial affairs closed, shut down, or denied. Someone in the federal government — the Securities and Exchange Commission, the Treasury or the Justice departments, maybe all three — had informed banks that dealt with weed that their FDIC protections would be revoked if they handled cannabis-tainted money.
So why can't Mickey Martin open up a bank account for his business? All he wants to do is start a school.
A few weeks ago, Martin strolled into a Bank of America branch in Martinez. He breezed through the setup for two new bank accounts, a personal and a consulting account, but when he began filling out paperwork for his business account, everything ground to a halt.
Martin is the founder of legendary East Bay-based marijuana edibles company Tainted, Inc., but he does not sell cannabis or cannabis-infused products (anymore). He's now a consultant, and his "Institute of Cannabis" is looking to cash in on the consulting opportunities available in newly medical Massachusetts, where other California cannabis-industry veterans are doing business.
As soon as the Institute of Cannabis was mentioned, Martin's customer service representative excused himself to make a phone call, Martin tells SF Weekly. The word had come down from on high: The bank refused his business. A "business decision," he was told, that boiled down to one word.
"It was simply the word 'cannabis' in our name and purpose that was the issue," says Martin, who noted that if he was running a hamburger stand called "Cannabis Burger," there would be no issue. "It was because of what we teach," he adds, "and one word in our business [name] that we were being discriminated against for banking."
In Washington, the State Liquor Control Board is in charge of that state's retail cannabis program. The bank handling its accounts: Bank of America, according to reports.
"So why the beef with a guy who wants to open a school with the word 'cannabis' in it?" Martin fumes. "The whole thing reeks of hypocrisy and corporate douchebaggery."
A West Coast-based Bank of America spokeswoman did not respond to an e-mail or telephone message seeking comment.
This kind of caution — denying even trade schools that don't deal in illegal substances, businesses that should pass by even the toughest federal prosecutor without a charge — may seem excessive. But it's the norm, even for enterprises that never touch a single marijuana bud.
In addition to schools, political campaigns have had accounts closed or denied for having the words "cannabis" or "marijuana" in them.
So here we are: enormous duffel bags of cash brought into banks to be converted into cashier's checks (for a fee) so taxes or rent can be paid, and lawyers and accountants receiving $20,000 in smelly $100 bills every quarter. And all of this will continue in California for the foreseeable future.
Colorado and Washington, however, where adults can buy marijuana without doctors' recommendations? They get yet another pass.
The Friday before President's Day, the Treasury Department announced that banks will be allowed to take marijuana dispensaries' accounts, provided a laundry list of rules was followed.
Banks would be required to submit "suspicious activity reports" to the feds for every weed business's transaction — and banks would only be allowed to take cannabis accounts if the weed business followed a strict set of statewide regulations.
Right. Statewide regulations. California still doesn't have those. So a billion dollars a year, and no banks.
"Try and run a $12-million business with no bank account. It's insane — you can't do it," a dispensary operator tells us. "Everything you try to do is hindered."
Almost like that was the idea all along.