Anson Stevens-Bollen
M edical marijuana producers around New Mexico have found a new banking home after suddenly getting the cold shoulder from other financial institutions in October.
Last month, an Albuquerque bank quietly agreed to open accounts for a half-dozen cannabis growers after dispensary owners approached it loaded with a bevy of information, including letters from the US Department of Justice and Treasury Department's Financial Crimes Enforcement Network.
Natural Rx clinic founder Trevor Reed tells SFR that persuading the bank to work with them was a group effort.
The bank isn't ready to go public until it gets comfortable with its new clients, but bank officials say that's likely to take place early next year. To get things rolling, the bank required producers to submit detailed financial records and agree to site inspections. Once executives determined the businesses were in complete compliance with the New Mexico Department of Health's program rules, they allowed accounts to open.
Attorney Jason Marks, who represents cannabis growers, says at the same time producers leaned on the bank to help, "they did everything requested to make them comfortable."
Public records obtained by SFR show producers generated just over $15 million in revenue in the first three quarters of 2014 and paid more than a $1 million in gross receipts taxes.
Those numbers are just one reason New MexiCann Natural Medicine founder Len Goodman says the bank is being careful.
"This banker gets it, gets the value in cannabis and gets the legitimacy of the business," says Goodman.
The service won't be cheap. The bank, according to Goodman, has set a high fee structure to offset additional expenses associated with stricter financial control procedures.
Despite new guidelines, other New Mexico banks appear to have taken a wait-and-see approach with medical cannabis producers. As of August, only 105 banks and credit unions around the country were working with legal cannabis sellers.
After being shunned by bank executives at MyBank, Bank of America and the State Employees Credit Union as well as other regional and national banks, the state's nonprofit producers were forced to deal in cash. That made it difficult to pay bills and payroll.
Not every producer lost its banking services this fall. If they do, Marks says it's good to have a local bank willing to work with them.
With thousands of greenbacks saved in security boxes and vaults, a handful of producers tell SFR they've opted to pay the Department of Health's $30,000 annual license renewal fee in cash.
During the banking crisis, producers worried their cash-only operations would put patients and employees at risk of robbery and other crimes.
Goodman, who installed an ATM inside his clinic at 901 W San Mateo Road in Santa Fe during the bank shutout, has decided to keep the machine "for our patients' convenience."
He tells SFR the Albuquerque bank understood the process and spent hours discussing how MBank in Oregon works with the marijuana industry before agreeing to open accounts here.
"The most important thing to them was that we are in compliance with federal guidelines," says Goodman.
Marks agrees. The feds, he says, have assured the banking industry they won't go after pot producers' deposits if the institutions complete due diligence and can assure them they're not black market dealers involved in nefarious activities.
For now, Reed is relieved that he's found a banking home—his fifth since being licensed.
"We're good to go," says Reed, adding his patients feel more secure when they visit his Albuquerque-area clinic. "It's just nice to know that we won't have to change banks again."
Email the reporter at Peter@sfreporter.com
