Banks wary of marijuana-dispensary accounts

Wells Fargo & Co. — which medical-marijuana dispensary owners say is
virtually the only bank in Colorado willing to take their business —
has stopped opening new accounts for dispensaries.

Cristie Drumm, a spokeswoman for the banking giant, said Wells Fargo is
examining state and federal laws to determine what the bank's risk is in
working with dispensaries.

"We're not actively opening accounts with these businesses at this
time," she said.

The move reflects a broader uneasiness among banks in the state about
working with the medical-marijuana industry, and it marks one more cloud
hovering over dispensaries.

Though Drumm said she was unsure whether the bank would also re-evaluate
its existing dispensary accounts, news of Wells Fargo's change in
attitude has dispensary owners worried they might lose a key ally in
their business plans.

"We wouldn't have a bank to put our money in," said Ryan Vincent, who
owns The Health Center in Denver. "I don't know what we would do. We'd
probably have to start rallying to put together a credit union."

Vincent said every dispensary he knows of uses Wells Fargo as its bank,
largely because the industry has received a cold shoulder from other
financial institutions. While Vincent said he understands the bank's
need to do what's best for its business, he said shutting out
dispensaries would deprive the bank of needed customers and deprive
dispensaries of needed stability, possibly forcing them to operate in
shadowy, cash-heavy ways.

"It's interesting to see that there's money and no one wants to hold
onto it," Vincent said. "We're trying to be a legitimate, above-board
industry in Colorado."

Tim Powers, a spokesman for the Colorado Bankers Association, agreed
that it's unusual for banks to turn away potential customers, but he
said legal and regulatory considerations have made many banks
uncomfortable working with dispensaries. Federal law requires that banks
not do business with companies operating illegally, and marijuana
distribution — for medical purposes or not — is still illegal
federally.

"Regulators are basically saying, 'Approach this with caution. There
could be problems,' " Powers said. "Because of that, a lot of banks are
taking the ultra-conservative approach."

"There's just lots of unknowns in this new emerging field of business."

That's true for dispensaries as well as banks.

"We wake up every morning with a new thing thrown at us," Vincent said.