TALLAHASSEE, Fla. – Since medical marijuana remains illegal under federal law, most banks won’t do business with dispensaries.
Late last year, the one bank working with Florida’s medical marijuana treatment centers pulled out of the state. But Florida’s pot growers and retailers may soon have a new banking option.
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Medical marijuana is a cash cow. One Florida license recently sold for $55 million.
Many in the business haven’t had a place to bank since First Green Bank, the only bank willing to handle their money, dropped all of it clients in December.
“This is a real public safety issue with all this cash -- not just in Florida, all over the country -- swirling around," said Jeff Sharkey, with the Medical Marijuana Business Association. "People can't pay their taxes. They're paying everything, payroll, in cash.”
In the absence of First Green Bank, medical marijuana treatment centers have turned to alternative ways of doing business.
The most common is a closed-loop system, in which patients use cash to load cards that are then used to purchase products.
“Without any options, MMTCs are trying their best to make it a safe and secure transaction point of sale,” Sharkey said.
Medical marijuana treatment centers are supposed to report all transactions to the federal government, but without backing from a bank, it’s nearly impossible to do so.
A new company now has its eyes on Florida’s budding industry.
Seattle-based GRN Funds is looking to fill the vacancy that First Green Bank left open.
“We're providing traditional banking services. It's a little bit different than what's going on currently with the closed-loop systems,” said GRN Funds Chief Executive Officer Justin Costello.
GRN Funds operates in five states. The company serves more than 300 accounts.
Costello said GRN Funds would operate much like First Green Bank did, helping legitimize the industry.
“We're trying to get the professional services around the industry to help the industry to assimilate into regular business," Costello said.
GRN Funds said it plans to begin offering its services to Florida medical marijuana treatment centers in the near future.