Pubdate: Wed, 29 Jun 2016
Source: Colorado Springs Independent (CO)
Column: Cannabiz
Copyright: 2016 Colorado Springs Independent
Contact:  http://www.csindy.com
Details: http://www.mapinc.org/media/1536
Author: Nat Stein

ALL CASH, NO BANKS FOR DISPENSARIES

At around 5 p.m. on Monday, June 20, a medical marijuana center on 
the north side of Colorado Springs was the target of an armed 
robbery. According to the police blotter, "a male with a light 
complexion wearing dark clothes" entered the business, weapon in 
hand, demanding cash. He made away with an undisclosed amount of 
money and merchandise.

Lt. Timothy Stankey, police department spokesman, says that because 
the suspect is still at-large and an investigation is just getting 
underway, the full case report is unavailable.

The dispensary in question is A Wellness Center, owned by a member of 
the city's Marijuana Task Force, Tom Scudder. Scudder has been 
criticized online as being "anti-patient" for supporting some 
ordinances City Council recently enacted - namely, the residential 
plant limit and year-long moratorium. He says it's "entirely 
possible" that this angst motivated the burglary, though he doesn't 
draw hard-and-fast conclusions. "Of course it's not true," Scudder 
says about his anti-patient reputation, adding that "we were one of 
the first places in town to offer substantial edibles and CBD products."

This is the third burglary of a Springs marijuana business this year. 
Last year, there were 19. Marc Vasquez of Erie, who heads up the 
Colorado Association of Chiefs of Police's marijuana committee, says 
he's not sure if marijuana businesses are targeted more than others. 
"Anytime you've got something of value - like cash or marijuana - 
you're going to have a certain number of crimes occur," he told the 
Indy. "So are they more vulnerable? Yeah, I'd say they are. But we 
also have bank robberies for the same reason."

Local police departments generally treat marijuana businesses like 
any other business - patrol officers are vigilant but don't devote 
extra time or resources to protecting them.

Establishments that deal with marijuana are required by state law to 
take security precautions. State statute requires all facilities use 
commercial-grade locks and install alarms at every point of entry. 
They must keep security cameras trained on everything inside the 
building - plus a 20-foot perimeter outside - close enough that 
anyone's facial features are recognizable. They're required to 
monitor their surveillance equipment. The state's Marijuana 
Enforcement Division, under the Department of Revenue, checks up to 
keep licensees in compliance. That means state and local law 
enforcement agencies get access to all footage at dispensaries 
throughout Colorado.

Scudder says his six-year-old dispensary is in full compliance, but 
his eight camera views of the burglary show a suspect unrecognizable 
behind a bandana, hat and gloves. He doesn't plan on beefing up 
security after this incident, citing a recent murder in Aurora as 
example that more hired guns doesn't necessarily mean more safety.

After that fatal shooting of a security guard at a pot shop two weeks 
ago, Blue Line Protection Group - one of the biggest private security 
firms in the cannabis industry - issued a statement declaring 
solidarity with the victim (who wasn't one of their own). "Moments 
such as this remind us that the cash-based nature of the legal 
cannabis industry here in Colorado makes these dispensaries and 
cultivation facilities prime targets of criminal elements based not 
only here in Denver, but criminal organizations heralding from other 
states, as well," the statement read.

And that - "the cash-based nature of the industry" - gets at the root 
of the public safety concern. No business owner would choose to 
operate that way, but because banks and credit card companies won't 
touch money tied to a federally illegal substance, this 
billion-dollar industry doesn't have access to traditional banking services.

There've been several attempts to rectify the situation. A new 
state-chartered credit union called Fourth Corner last year applied 
for a master account through the Federal Reserve with the express 
purpose of banking with Colorado's cannabis industry. When the Fed 
refused, Fourth Corner sued, arguing there's no reason to prevent 
them from banking given the Department of Justice has said it won't 
prosecute anyone operating in compliance with state marijuana laws.

Government lawyers defended the Fed's decision to reject Fourth 
Corner, arguing in a motion to dismiss that "the court would not 
entertain other such attempts - such as if Colorado enacted a scheme 
to allow trade in endangered species or trade with North Korea in 
derogation of federal laws, and then chartered a credit union to 
handle the finances for companies conducting such illegal trade."

Ultimately, the judge sided with the Fed, writing that "these [DOJ] 
guidance documents simply suggest that prosecutors and bank 
regulators might 'look the other way' if financial institutions don't 
mind violating the law. A federal court cannot look the other way."

Without the prospect of a cannabis credit union, Colorado's marijuana 
industry looks to D.C. for a better fix. Legalization supporters have 
asked Congress previously to let banks do business with the marijuana 
industry, though legislation failed last session. Mid-June, the 
Senate Appropriations Committee passed an amendment that would 
prohibit the use of federal dollars to penalize financial 
institutions that serve state-legal marijuana businesses. But now a 
similar proposal has stalled in a House committee.
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MAP posted-by: Jay Bergstrom