Pubdate: Fri, 10 Apr 2015
Source: Denver Post (CO)
Copyright: 2015 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: David Migoya

POT BIZ OWNERS MAKE PITCH

Elected Leaders Bring a Fed Branch Chief Together With Those Hurt 
Most by the Lack of Banking Services.

Federal Reserve Bank of Kansas City president Esther George on 
Thursday listened intently to a group of 20 businessmen, bankers and 
government officials who talked about the troubling lack of banking 
services available to the marijuana industry, but offered little 
indication how it could be resolved.

In the first meeting of its kind, George heard tales from marijuana 
business owners that ranged from one who was made to close more than 
a dozen bank accounts - each time leaving with an armful of cash - to 
another who described how a family member uninvolved with the 
enterprise was forced to close an investment account, according to 
people who attended the closed-door affair.

"The fact that she took the time to meet ... is a significant 
indicator of how seriously these issues are being taken now," said 
Taylor West, deputy director of the National Cannabis Industry 
Association. "So even if there isn't immediate action coming out of 
the meeting, it's still definitely a positive step forward."

Bankers and credit-union executives told George about unease about 
federal guidelines for handling marijuana accounts that were issued 
last year, describing concern about regulator backlash should a 
trusted customer suddenly turn out to be rogue.

"What she offered was listening," Marijuana Industry Group executive 
director Michael Elliott said of the hour-long meeting at Federal 
Reserve branch in downtown Denver. "While that might not seem like 
much, we very much appreciated it. Our message to her was that we are 
partners, people who care about safety and the legitimacy of this industry."

George was not made available for comment after the meeting, but the 
Federal Reserve said it "has a role in ensuring the financial 
system's safety and soundness in the state of Colorado and to gather 
information from local businesses and community leaders."

The unprecedented gathering was forged by Rep. Jared Polis, D- 
Boulder, and Rep. Ed Perlmutter, D- Golden, who asked George to give 
industry leaders a chance to describe the problems they have faced in 
opening- and keeping-bank accounts.

George was already in town for a number of other meetings, a Federal 
Reserve spokesman said.

"No one believed we'd come away from this with a solution," said 
Andrew Freedman, Gov. John Hickenlooper's director of marijuana 
coordination. "But there were stories in there that showed how this 
really impacts people's lives."

Among them, business owners who handle cash only payroll payments 
with armed guards nearby.

"I shared the story of how we're so heavily regulated ... and how 
it's extremely cumbersome to be an all-cash business," said Cannabis 
Business Alliance chairwoman Jaime Lewis, who owns Mountain Medicine 
in Denver. "As of now, I've been kicked out of three banks and it's 
pretty frustrating."

Absent was any mention of the status of an application by the Fourth 
Corner Credit Union, a Denver-based business aiming to become the 
first in the world to cater specifically to the marijuana industry.

Though chartered by Colorado to operate, Fourth Corner lacks a master 
account that can only come from the Federal Reserve. Its application 
has been pending since November.

Fourth Corner officials said they were not invited to the meeting.

George did not say why the application remains pending, several 
people at the meeting said.

Although George offered little to indicate what the industry could 
expect in the future, she was clear that much of what the Federal 
Reserve does is rooted in what Congress mandates, one businessman said.

"She gave her perspective as what the president ( of a Federal 
Reserve branch) can do, and how they're subjected to the rules that 
are made at the higher level and how they have to execute them," said 
Chuck Smith, chief operating officer of Dixie Brands, which owns 
Dixie Elixirs, amaker of pot-infused products. "She did say there's 
room for an understanding for how the rules should be interpreted in 
a state like Colorado, where marijuana is legal."

Perlmutter said he's looking to reintroduce a bill that would give 
financial institutions the legal clearances and protections necessary 
to bank the industry. A previous effort did not make a committee 
hearing calendar.

"She was very circumspect in her remarks," Perlmutter said, "not 
giving us a yes, no or maybe."

Nevertheless, industry representatives remained upbeat, though reserved.

"We're on the same side to push this ball up the hill," Lewis said, 
"but I'm not running down to a bank right now to go open an account."
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MAP posted-by: Jay Bergstrom