The banking industry as it relates to marijuana in the United States. Marijuana is currently a "cash-only" industry making transactions less efficient and require more hands-on action by employees. Specifically, in order to pay taxes, they must be paid electronically or else the company will incur a fine. To pay electronically, the company would have to launder money. The ethical question being, is it right to put companies in this position between heavy, punitive fines or illegal action?

1. Banking on Pot
Nikolas Shad

2. Business Climate
• States have legalized marijuana
• Washington, Colorado, Oregon, Washington, District of Columbia
• More on the way(?)
• “Green rush”
• 2,500 business licenses, 600 stand-alone dispensaries
• More than Starbucks, McDonalds, 7/11…combined
• Of 7,600 banks, 220 accept “cannabis cash” (U.S. Treasury
Department)
• 70% of cannabis companies DO NOT have a bank account

3. Regulations Today
• (Certain) States allow marijuana to be distributed and sold
• United States (Federal government) bans marijuana
• Banks must follow federal regulations
• Cash-only
• Salary, utilities, mortgages, taxes, etc.
• 10% penalty on federal employee withholding taxes (electronically)
• No state penalty
• Two options to pay taxes
1. Pay 10% penalty
2. Launder money through another company (encouraged)

4. Current Cash Handling
• Legal or illegal? Cash-only
• Shaun Gindi’s duffel bag bulging ($20s)
• $150K vaults
• Cars and homes
• Venmo
• Labeled armored trucks
• Target for violence and theft

5. Proposed Solutions
• “An American Indian Banking System”
• Proposed by Harvard grad, Anthony Rivera
• CannaNative
• Goal: Bank on legal-pot industry’s $3 billion in annual revenue
• Pro: Effective, Con: “Money laundering”
• Hypur and PayQwick
• B2B companies that electronically process payments and make paperwork
for sending money to banks less difficult and more efficient

6. Ethical Issue
Is it ethical to place cannabis businesses
in this position?
When at the point of paying higher taxes
or attempt to launder money, is either
option ethical?

7. Opinion
• Marijuana is controversial itself
• Strictly business perspective
• Let the market thrive and legalize marijuana throughout nation to allow banks to
take in money from cannabis shops
• Creates safer atmosphere, increases market of customers and allows for more fluid
transfer of funds rather than being cash-dependent
• Personal perspective
• Banks should have easier access to funds from marijuana businesses
• Neither option is ethical when choosing as a company. One risks revenue and one
risks the welfare of the company
• Regulators encourage “money laundering”
• Taxes acting as punitive measure despite businesses doing best they can to follow tax
code

8. Any Questions?

9. Sources
• https://www.bloomberg.com/news/articles/2015-10-11/where-to-stash-
cannabis-cash-tribal-nations-make-bid-to-bank-it
• http://www.governing.com/gov-data/state-marijuana-laws-map-
medical-recreational.html
• http://www.businessinsider.com/americas-marijuana-companies-cant-
put-money-in-banks-2015-11
• http://www.denverpost.com/2014/07/02/irs-fines-unbanked-pot-shops-
for-paying-federal-payroll-tax-in-cash/
• http://www.inc.com/will-yakowicz/the-startup-quietly-convincing-
banks-to-accept-cash-marijuana-industry.html
• http://www.wsj.com/articles/marijuana-companies-stuck-doing-
business-the-old-fashioned-way-in-cash-1459416605