For months, Colorado Springs State Bank has been working with medical marijuana centers shunned by most lenders, because pot is illegal according to the same federal government regulating them. But that will end next month, and attorney Jessica Peck feels the decision is "much more important than, 'We can't have a merchant account' or 'Where will we do our checking?' It empowers the black market and more cash transactions."
Most locals learned of the CSSB development from an article this week in the Boulder Daily Camera that was shared by the Denver Post. But the news was actually broken on August 12 by the Colorado Springs Independent, which noted that the bank had been told by its Texas-based owners to drop its MMJ patrons. Accounts must be closed by September 30.
That CSSB has been working with members of the MMJ industry has been an open secret -- unsurprising given the number of front-range outfits that have worked with the institution. "I would say it may have serviced 80 percent of the state's industry," estimates Peck (formerly known as Jessica Corry). "There probably wasn't a legitimate operation in Colorado that hadn't at least talked with them."
But while the bank actively courted medical marijuana businesses, as indicated by a video on the aforementioned Independent post (it's on view below), personnel haven't been eager to talk about it with Westword. Since the first half of the year, we made as many as ten interview requests with senior vice president Alan Gregory, said to be the man in charge of the initiative, but he never returned our calls.
The reason for his reticence likely has to do with a fear that by drawing too much attention to its medical marijuana program, CSSB was inviting scrutiny from federal regulators, and perhaps even criminal charges such as money laundering. Note that in April, U.S. Attorney John Walsh sent a letter to Colorado legislators working on HB 1043, the so-called medical marijuana clean-up bill -- and one of the two provisions he specifically attacked called for the state to "license a marijuana investment fund or funds under which both Colorado and out-of-state investors would invest in commercial marijuana operations." Walsh wrote that "the Department would consider civil and criminal legal remedies regarding those who invest in the production of marijuana... even if the investment is made in a state-licensed fund of the kind proposed." This portion of the measure was promptly excised.
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Where's that leave local medical marijuana businesses? In a tough spot, in Peck's view -- which is why some entrepreneurs have been talking about putting together their own credit union. Not that there aren't major obstacles to this plan. "Coming up with millions of dollars and getting members to agree on how to put this together could be a little bit of a struggle," she concedes. "And there'd be questions about the FDIC and protections you'd have at a typical credit union." But she sees plenty of positives, since "you'd have the basic sharing of costs, benefits and risks, and you can operate in the brightest sunshine. You don't have to be the black sheep of Colorado's economy anymore. So I think people have the incentive now to come to the table."
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After all, she notes, "what other options are there?"
Look below to see the aforementioned CSSB video.
More from our Marijuana archive: "Medical marijuana: Feds remove holds on bank accounts, return seized $20,000 to MMJ centers."