High: 54º Low: 30º
High: 57º Low: 32º
High; 59º Low: 37º
Seattle, Washington (KOMO) Imagine a multi–billion–dollar industry that cannot operate without banks. Stores that sell marijuana in Washington State now have that problem. On the state level, small amounts of marijuana are legal, but on a federal level, banks are afraid to touch what is technically still drug money.
Cash has an interesting quality: it absorbs smells.
So if it's kept anywhere near marijuana, you'll have problems taking it to the bank.
"I guarantee you that you are going to talk to the bank manager, and that's not a comfortable situation to be in," says John Davis, who sells marijuana.
John Davis knows that first hand. He's had his business checking and credit card accounts shut down, once the banks found out he runs a west seattle medical marijuana access point. Banks don't want anything to do with pot.
Davis adds, "everything I do here has to be cash, which makes it more attractive to theft, which is why my store is built like a bank on steroids."
He put this cash into his safe for our benefit. His employees follow a strict routine to avoid the marijuana smell, putting cash in a separate safe.
It's a provocative dilemma as our state wrestles with a new multi–billion dollar legal pot industry that needs the banks' involvement.
For banks, it comes down to this: it's a money laundering issue, because money made from pot is illegal in their eyes.
Since banks are regulated by the federal government, and the feds see marijuana as illegal, any bank knowingly receiving money from a business selling an illegal drug — regardless of state law — is subject to federal penalties.
Davis Straus, a bank president says, "right now, it doesn't make sense to me to take that kind of risk."
Straus adds, "the banks are between a rock and hard spot."
He won't give an account to a guy like davis but believes some banks, seeing profits, may take a "don't ask, don't tell" approach.
"I think there will be banks that will take it, but I think there has to be a lot more clarity before banks get involved with something that's illegal at the federal level."
What is going to happen?
"i don't think anybody knows."
"it's going to get weirder weirder and weirder."