This document discusses the challenges that marijuana businesses face with banking due to conflicting state and federal laws regarding cannabis. While some states have legalized marijuana, it remains illegal at the federal level, so banks that follow federal regulations cannot accept funds from cannabis companies. As a result, 70% of cannabis businesses do not have a bank account and must operate entirely in cash. The document outlines proposals for cannabis-focused banking solutions and explores whether requiring businesses to pay penalties or launder money is ethical given the current situation. It concludes that strictly regulating the industry increases safety risks and that both federal legalization and expanded banking access would help address these issues.

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 “Solution”
• “An American Indian Banking System”
• Proposed by Harvard grad, Anthony Rivera
• CannaNative
• Goal to 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 fo
sending money less difficult

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

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