Flush with cash, marijuana entrepreneurs yearn for banking services

Colorado's recreational retail pot sales are booming, but entrepreneurs have trouble accessing credit and bank accounts

January 8, 2015 3:30PM ET

by Lori Jane Gliha @ljgliha & Serene Fang @fangsey

DENVER – When Colorado launched retail marijuana sales in 2014, all sorts of pot-related businesses began booming. Entrepreneurs like Wanda James and her husband, Scott Durrah, looked for creative ways to continue cashing in on the new, marijuana-infused phenomenon.

They were already restaurant owners and ran a medicinal marijuana dispensary, but they had cooked up another idea that they hoped would bring in even more business: A marijuana cooking school for people over the age of 21.

“It’s completely unique. There are no other cooking schools, and we’re seeing different chefs now starting to get involved in it,” James said. “The idea of having an infused food is amazing, but what we have found is the milligram levels in a lot of infused foods is so much higher than most Americans or most people are able to deal with.”

She added: “We want to be able to show people how to enjoy the high of cannabis with infused foods but not go overboard and to be able to explain to people what their body is going to be able to handle and how to ease them into it.”

But setting up the new business hasn’t been without obstacles. James said the banking industry is still tough on pot entrepreneurs. Since the federal government still classifies marijuana as an illegal substance, many banks are afraid to handle so-called drug money, making it difficult for businesses to manage their income and obtain loans to grow their businesses.

Wanda James is one of many pot business entrepreneurs that have had trouble gaining support from the banking industry.

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“It’s kind of incredible,” James said. “You would think that a multibillion-dollar business would be able to have access to capital to grow your business; banking, credit cards, checking accounts – the very basics that any other business would have. Here in the cannabis industry, we still don’t have that yet.”

James said she has been forced to “search far and wide for the right investor” for her business, and although her restaurant, Jezebel’s, has a bank account, her pot-related business does not.

“The dispensary owners and the people who are making money from the sale of cannabis still do not have the ability to do basic banking,” she said.

James said the predicament will put employees dealing with cash-only transactions in danger.

You would think that a multibillion-dollar business would be able to have access to capital to grow your business; banking, credit cards, checking accounts – the very basics that any other business would have. Here in the cannabis industry, we still don’t have that yet.

Wanda James

Wanda James working at her restaurant, Jezebel's, in Denver.

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“You can’t have these marijuana businesses making $20,000 to $40,000 a day and not have a way of depositing that money in a bank. It sets up the employees to be in a very unsafe situation, especially as soon as the bad guys figure out that this could possibly be a target, so the states have to change that,” she said.

Still, James is hopeful for a new cannabis credit union in Colorado. The state chartered The Fourth Corner Credit Union in November, giving it the ability to open its doors and take deposits, but the credit union has not yet been granted access to the Federal Reserve System by the federal government. But James remains optimistic.

“We’re very excited to see that come along,” she said.