Problem: Mountains of Cannabis Cash in ColoradoIs private banking the answer to getting more than $1.3 billion in cash off the street and out of the backpacks and briefcases of dispensary owners, good men and women who are forced to trade only in cash and aren’t allowed to deposit said cash into an honest account with any federally-insured institution?
Solution: Safe Harbor Private Banking from Partner Colorado Credit UnionDissonance with state and federal law is nothing new in colorful and cannabis-friendly Colorado, but a solution to the weed industry’s banking problem is. Safe Harbor Private Banking from Partner Colorado Credit Union is rising to the occasion with something like a 50 percent market share in the state. Sundie Seefried, author of “Navigating Safe Harbor: Cannabis Banking in a Time of Uncertainty,” is CEO and president of the Denver-based credit union.
Seefried joined forces with the College of Humanities and Social Sciences and the Institute of Cannabis Research at Colorado State University-Pueblo last month to present at the Cannabis Policy Initiative Forum, which was sponsored by the CHASS Center for Social and Economic Justice.
According to its website, Safe Harbor, “is the nation’s first and only subscription-based banking program designed to help both financial institutions and dispensary owners create a legitimate business banking relationship that is fully compliant with current and future government regulations.”
At the federal level, by choosing to put her 30-plus years of experience in the banking industry to work for cannabis clients, Seefried may or may not qualify for a 10-year prison sentence in the name of money laundering. Business and personal banking for people in the weed industry, to include budtenders and trimmers, is incredibly tough with any federally-insured institution. Seefried shared the organization’s unofficial mantra: “Every dollar is a cartel dollar unless we can prove it otherwise.”
Seefried is the daughter of Baptist missionaries and seems to understand the age-old concept of “reputation risk” and the importance of solid and effective strategies for risk mitigation. During the presentation in Pueblo last month, Seefried told a story about her CPA asking her to read “Orange is the New Black,” by Piper Kerman. The CPA wanted to make sure Sundie understood the dangerous nature of her business plan and the inherent risk of prison time. She acknowledged the risk and moved forward in spite of the terrible threat of incarceration. And that, I think, is the American dream in action, folks.
She justified the decision by explaining:
“Way back in the early 1900s, the reason credit unions were chartered by Congress was to serve the unbanked and underserved. Normal consumers could not get bank accounts with big banks, so Congress said, ‘We have to fix this. We have to get people banked.’ They chartered this tax-exempt corporation called credit unions – owned by the members, so that’s why we’ve been tax-exempt on the federal level for all these years, because we respond to the needs of our members. When we make money, the only place that money can go is back to our members. So that’s the difference between a credit union and a bank.”
When you consider the $1.3 billion in 2016 revenue from cash-only marijuana sales in the state of Colorado that netted something like $200 million in tax payments by these highly regulated and almost entirely legitimate business owners, you also need to consider the harsh realities of those same business owners being forced to carry loads and loads of cash around in backpacks and briefcases to trade said cash for money orders. This practice is unfair and it is unsafe. And it appears to be changing, but if you’re considering a cannabis client account with Safe Harbor, be prepared for some fairly serious vetting and a considerable waiting list.
Jennifer Knight is a freelance writer, thanks in no small part to her day job with Durango Solar Works. (firstname.lastname@example.org)Roldo (the illustrator) is an ink-slinging angel, an investor of true talent.