Katelyn Baker
Well-Known Member
Medford, Ore. – As legalized marijuana brings more business to Oregon, some communities are seeing a large amount of cash in the economy thanks to strict regulations keeping banks away from the businesses.
Banking officials say that after years of moving away from cash, financial institutions have seen a recent influx due to the marijuana industry, The Mail Tribune reported.
"We're seeing much more cash," says Jeri Reno, chief operating officer at Medford-based People's Bank of Commerce. "It really is the unintended consequences of passing new state laws."
Many banks will not offer lines of credit to marijuana businesses due to high federal penalties for holding pot-tainted money. As a result, the marijuana industry operates with cash. Dispensaries pay their employees, landlords, lawyers and most other people with cash that is then spent in grocery stores and on other daily tasks.
Reno said the supply chain best illustrates how far reaching cash in the marijuana industry can be.
"A marijuana grower is going to need irrigation, fencing, greenhouse supplies and soil," Reno says. "So you can see how far-reaching it is in that it impacts so many businesses in the valley."
As a result, building supply firms, for example, saw increased cash as growers acquired fencing and construction materials.
"We've had people come in and pay three, four or five thousand dollars in cash for the materials they needed," says Becky Hingle, office manager for Hughes Lumber Co. "We've seen a lot of cedar fencing go out of here."
People's Bank Vice President and Operations Manager Dawn DeVita said the southern Oregon-based institution does not work directly with marijuana businesses, but it has seen an increased volume of cash circulation.
"So indirectly, we have a cash society again," DeVita said. "We kind of went back 10-plus years."
The increase in cash came when recreational use became legal in July 2015, Reno said. Growers began obtaining licenses from the state in May 2016.
Because the Bank Secrecy Act requires banks to monitor customer deposits for any Anti-Money Laundering law violations and file reports of suspicious activity to the U.S. Treasury, many banks now have to spend more time dealing with the influx of cash.
"It has evolved over the last five years," DeVita says. "We have daily reports, weekly, monthly. We look for behaviors with algorithms for things outside of normal business patterns. Based on our size, we've seen a substantial increase in those. It's nothing directly related to the marijuana industry, but to BSA regulations."
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Banking Regs Mean Oregon Flush With Marijuana Cash
Author: Associated Press
Contact: Statesman Journal
Photo Credit: Molly J. Smith
Website: Statesman Journal
Banking officials say that after years of moving away from cash, financial institutions have seen a recent influx due to the marijuana industry, The Mail Tribune reported.
"We're seeing much more cash," says Jeri Reno, chief operating officer at Medford-based People's Bank of Commerce. "It really is the unintended consequences of passing new state laws."
Many banks will not offer lines of credit to marijuana businesses due to high federal penalties for holding pot-tainted money. As a result, the marijuana industry operates with cash. Dispensaries pay their employees, landlords, lawyers and most other people with cash that is then spent in grocery stores and on other daily tasks.
Reno said the supply chain best illustrates how far reaching cash in the marijuana industry can be.
"A marijuana grower is going to need irrigation, fencing, greenhouse supplies and soil," Reno says. "So you can see how far-reaching it is in that it impacts so many businesses in the valley."
As a result, building supply firms, for example, saw increased cash as growers acquired fencing and construction materials.
"We've had people come in and pay three, four or five thousand dollars in cash for the materials they needed," says Becky Hingle, office manager for Hughes Lumber Co. "We've seen a lot of cedar fencing go out of here."
People's Bank Vice President and Operations Manager Dawn DeVita said the southern Oregon-based institution does not work directly with marijuana businesses, but it has seen an increased volume of cash circulation.
"So indirectly, we have a cash society again," DeVita said. "We kind of went back 10-plus years."
The increase in cash came when recreational use became legal in July 2015, Reno said. Growers began obtaining licenses from the state in May 2016.
Because the Bank Secrecy Act requires banks to monitor customer deposits for any Anti-Money Laundering law violations and file reports of suspicious activity to the U.S. Treasury, many banks now have to spend more time dealing with the influx of cash.
"It has evolved over the last five years," DeVita says. "We have daily reports, weekly, monthly. We look for behaviors with algorithms for things outside of normal business patterns. Based on our size, we've seen a substantial increase in those. It's nothing directly related to the marijuana industry, but to BSA regulations."
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Banking Regs Mean Oregon Flush With Marijuana Cash
Author: Associated Press
Contact: Statesman Journal
Photo Credit: Molly J. Smith
Website: Statesman Journal
