Recreational marijuana has been legal in Washington State since 2014 and increasingly, cannabis companies are finding credit unions and small community banks open to serving their basic financial needs.
Brendan Hill is co-owner of Paper & Leaf, a cannabis shop on Bainbridge Island located a short ferry ride from downtown Seattle. He and his business partner Steve Kessler started looking for a bank willing to do business with a cannabis retailer back in August of 2014. “There were only two such banks in Washington State at the time,” and both operated solely in the state, he said.
Hill says the bank he chose, Timberland, has been around since the old timber rush days, and are proud of their connection to the frontier. “They welcomed us as a legitimate part of this community, they wanted to do their part,” he said.
Timberland Bank has twenty-two branches in Washington state and is considered to be a small community bank.
Salal Credit Union is another banking option for cannabis-related businesses in Washington State. It offers checking accounts, cash pick-up and other services to the industry.
To open a “Green” account at Timberland, Hill submitted his license information, operating agreement, and signed several waivers allowing for state cannabis agency scrutiny. The business has four accounts: two “Green” and two “Green related” accounts.
Hill says his local branch serves several cannabis retailers and growers who deposit cash daily or weekly. “Their bill counter gets a lot of mileage,” he said.
Hill’s business checking accounts have a debit Mastercard attached, but there are still some financial services that elude him and the rest of the industry. “We don’t have access to any lines of credit. There are no traditional business loans available to us at this time,” he said.
Because his is a cash only business, he has implemented extra security steps into his operations including end-of-day recounts, and multiple bank deposit runs daily.
State laws lay out extra requirements for the bank as well. Hill says Timberland does annual facility inspections of its cannabis business customers, making sure there are ID checkpoints at the door and register, that no employees are under the age of 21, that all security cameras are operational, and that there’s a fireproof safe and operational security system.
Banking is significantly harder to find in states that are newer to legal cannabis sales. Few want to be among the first to take the risk, especially in light of Attorney General Jeff Sessions’ stance and action regarding the industry. Sessions rescinded the Cole memorandum, which protected cannabis companies operating legally under their own state laws, from federal prosecution.
Donald Trump said he was in favor of medical marijuana availability, but that was when he was a presidential candidate. Until recently he had made no movements in that direction, but in April told Senator Cory Gardner of Colorado he would be open to legislation allowing states to determine their own cannabis laws.
