Where Pot Entrepreneurs Go When the Banks Just Say No

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The small burgundy satchel bore the hallmarks of rugged craftsmanship: top-grain leather, double stitching on the straps. It was wider at the bottom, sort of like an inverted funnel, and two buckles secured the flap. Babak Behzadzadeh knew exactly how he might use the bag when he saw it hanging in a shop in Playa del Carmen, Mexico: It could be his bank.

Behzadzadeh placing cash in his satchel. CreditAngie Smith for The New York Times

Behzadzadeh owns two businesses in Denver. Avicenna Products makes potent marijuana concentrates. Next door, Green Sativa grows marijuana, which it sells directly through its own medical dispensary and store. By last spring, after just 18 months in operation, they were generating $250,000 to $350,000 in monthly sales, all of it in cash. During the workday, the satchel sat on a file cabinet in Behzadzadeh’s small office at Avicenna, stuffed with tens of thousands of dollars that funded the two operations.

One weekday afternoon last March, Avicenna’s manager, Alex Elsberg, a bearish, bearded man with blue-tinted sunglasses perched on his crown, was prepared to drive a 100-mile circuit around Denver’s north suburbs, where he would deliver concentrate to one dispensary, collect a payment from another and then, on his way back, visit a grower in Boulder to buy about 11 pounds of trim, the larger leaves that are stripped off the plants’ flowers and are the raw material for concentrates. Behzadzadeh had agreed to pay $5,850 for the trim, and while Elsberg would collect at least that much in cash at his first two stops, he liked to separate the money coming in from the money going out.

Elsberg walked into Behzadzadeh’s office and over to the satchel, which is about the size of a small purse — Elsberg, who is 37, likes to call it Behzadzadeh’s “murse,” for man purse — and removed six bundles of bills. He sat at the ornate wooden desk and on its inlaid-leather top began counting the bills in each thousand-dollar stack. Behzadzadeh, 50, was dressed in his customary uniform of brown leather vest and gray shirt, and he wore a silver Bluetooth headset like a necklace. As the men talked and laughed, a stack fell to the floor. “One day, I brought in $6,000 from the safe from my store,” Behzadzadeh reminisced. “I put the money in the bag. The next day I was short a thousand dollars.” When the dispensary manager turned up nothing, Behzadzadeh grew alarmed. “So Alex comes by to throw something in the garbage can, and there’s a thousand dollars!” They laughed heartily. “If we had bank accounts,” Behzadzadeh said, turning serious, “it’d be much easier.

Babak Behzadzadeh among the marijuana plants at Green Sativa.CreditAngie Smith for The New York Times

Growing and selling marijuana are, like using it, legal under Colorado law. But banks tend to take their cues from the federal government. Not only does selling marijuana violate federal law; handling the proceeds of any marijuana transaction is considered to be money laundering. Very few banks are willing to bear that risk. By the time Behzadzadeh took his Mexican beach vacation, he had already opened checking accounts for his businesses at Wells Fargo and Chase — and then saw them closed when the banks discovered what they were for.

In most of the 22 states that, along with Washington, D.C., and Puerto Rico, have legal marijuana markets, cash is not simply king; it is all-consuming. It is counted and recounted and stuffed into bulging envelopes, slid into back pockets and ferried around town in beaters and fully loaded S.U.V.s. Customers exchange it for marijuana at the counter; businesses use it to buy weed from wholesalers and for gardening supplies, plastic bottles and lab equipment. They use it for money orders at grocery stores. It pays employees and the rent and electric bills and taxes. It is fed into owners’ personal bank accounts at A.T.M.s. On Jan. 1, California, which has permitted medical marijuana for decades, began allowing legal sales of recreational marijuana, creating a potential market many times the size of Colorado’s, with the potential for many more banking headaches.

But for Behzadzadeh, a solution lay in sight. In the fall of 2016, Elsberg and another employee, both veterans in the marijuana industry, put him in touch with Sundie Seefried, the chief executive of Partner Colorado, a credit union in Arvada, a Denver suburb. A division of the credit union, Safe Harbor Private Banking, provides checking accounts expressly for the marijuana industry, in clear violation of federal law.

Partner Colorado was originally chartered in 1931 to serve postal workers; with about $350 million in assets, it still amounts to little more than a rounding error in the state’s financial-services market. But in three years it has established itself, entirely through word of mouth, as the marijuana industry’s biggest banker. These clients deposited $931 million in 2017. No other United States bank or credit union has probably taken as much, says Robert McVay, a Seattle-based lawyer who advises institutions on banking marijuana business. Most of those deposits are cash, taken off the streets and thereby reducing the latent, associated threat of robbery — a threat not just to those working in the industry but also to the ordinary people around them. As one banker put it to me, “I don’t want to stand in line next to a backpack filled with $30,000” while someone fills out money orders.

To manage these accounts, Seefried — working largely alone, in order to shield her colleagues from possible prosecution — created a sophisticated process to match deposits and withdrawals to marijuana transactions that are legal in the state. Seefried’s bankers delve deeply into nearly every aspect of their clients’ finances and operations. “I said it in every interview in the beginning,” Seefried told me. “ ‘You have to understand: We’re going to be the nosiest banker you ever had.’ ”

Five other small banks in the state also offer checking accounts to the industry and many more make occasional exceptions for companies owned by longtime customers, according to people who study and work in Colorado’s marijuana industry. (They don’t lend them money, though, because the federal authorities could seize whatever collateral backs a loan.) But it’s difficult to say how many of these businesses have bank accounts in their own name, because most banks refuse to publicly discuss this line of business, and they require clients to sign agreements promising not to discuss the relationship. A similar situation exists in Washington State, where voters legalized buying and using recreational marijuana in 2012, when Colorado did.

Seefried, by contrast, is happy to talk about it. “Her openness to partner with me to teach stakeholders has been second to none,” says Chris Myklebust, who oversaw Safe Harbor and every other financial institution chartered in Colorado as the state’s banking-and-financial-services commissioner until he left the job in November. Seefried often accompanied Myklebust around the country to explain to state officials and bankers how marijuana banking works in Colorado. “She understands the burden of being a financial institution serving the legal marijuana industry,” he said. (She has also written a book, “Navigating Safe Harbor,” about it.) Seefried has managed to build a large and expanding portfolio of accounts that so far has withstood federal scrutiny. She hasn’t been indicted, and she hasn’t been told to stop. Seefried has concluded that, for the moment at least, her chances of facing prosecution are small — “less than 20 percent,” she says.

Last spring, Behzadzadeh was gathering up dozens of business and financial records to send to her, and it was taking weeks. “Sundie,” he moaned one day after taking a call from his compliance officer, who was helping compile the paperwork. “She wants my firstborn” — and, he added, his left testicle. In the meantime, cash kept moving through the business.

After returning from his rounds, Elsberg laid a pair of invoices on the table. Then he handed Behzadzadeh a No.10 envelope bulging with bills. Elsberg had already counted the money when he received it; now Behzadzadeh began counting it for himself, separating it into thousand-dollar stacks, before depositing them into the satchel. Then, having double-checked the totals, he entered each payment into his QuickBooks ledger and then into a Google spreadsheet that served as a cash log. The invoices are filed in case an inspector from the state’s Marijuana Enforcement Division comes calling.

Stacks of cash sitting inside Behzadzadeh’s safe.CreditAngie Smith for The New York Times

Every dollar that comes into Behzadzadeh’s companies is counted by Behzadzadeh or one of his employees at least three times before it goes out again. “I’ve gotten to the routine where I need to put my own elastic bands around them,” Behzadzadeh said. “That way, I know I counted them.”

Seefried imagined that these would be her golden years, time spent at her vacation house in Santa Fe painting desert flowers in the style of Georgia O’Keeffe. Seefried is just 56, but she was a credit-union veteran when she joined Partner Colorado in 1995; as its chief executive, she kept it profitable through the 2007 recession. In a stodgy industry, Seefried stands out, tall and even a little glamorous. In 2014, as her husband prepared to retire from another credit union, in Colorado Springs, she made plans to wind down her own career. Then one summer evening, while out for drinks, a group of lawyer friends confronted her with a question: Why couldn’t their marijuana-industry clients get bank accounts?

Seefried had in fact wondered about marijuana banking before. But, she said, “nobody wanted to talk about it.” Now, buttonholed by her friends, she promised to investigate. She discovered that the conflict over marijuana — permitted by the state, prohibited by the United States — in Colorado and elsewhere has created a strange and uncertain legal landscape. “It prevents either state law or federal law on marijuana from being effectively implemented,” says John Walsh, who served as the United States attorney in Colorado from 2010 to 2016.

Even Colorado officials who opposed legalizing marijuana — among them Gov. John Hickenlooper — support banking the proceeds, and not only because it reduces the prospect of robbery and violence. State laws carefully control, and heavily tax, marijuana distribution; regulators and law-enforcement officers investigating violators rely on the paper trails bank accounts leave behind. Banking, says Andrew Freedman, who for more than two years was the governor’s director of marijuana coordination, “is a really great redundant measure to make sure people are playing clean.”

But that’s not a view broadly shared by federal officials. Seefried says she was astonished last year when a Drug Enforcement Administration agent, speaking at a forum at the state Capitol, made the same slippery-slope argument against banking marijuana that is often made against smoking it: It would lead to banking cocaine, heroin and so on. Since Colorado’s first medical-marijuana dispensaries opened their doors in 2009, the Department of Justice has seesawed between tolerating and prosecuting the nascent industry. National institutions like Wells Fargo, which had fished for clients at marijuana-industry conferences, were the first to abandon the field. Local banks followed, though a handful continued to serve some marijuana businesses discreetly. A game of cat and mouse ensued: Businesses would open an account under an innocuous-sounding name; after a few months of large cash deposits, the bank would investigate and close the account. When bankers noticed that currency from marijuana business reeked, enterprising owners began spraying it with Febreeze.

In 2013, the Justice Department decided to focus on what it called “the most-significant threats” in marijuana trafficking. A memo from the deputy attorney general, James Cole, established eight priorities for federal law enforcement to investigate, such as a legal business as a front for other criminal activity, diverting marijuana to states where it remains illegal and selling marijuana to children. Yet around the same time, D.E.A. agents began showing up at bank offices in Colorado to remind executives that as far as the federal government was concerned, the whole industry remained illegal. The state bankers’ association formally urged its members to avoid marijuana businesses. But to Seefried’s great surprise, none of her state regulators did likewise. “Everybody knew this money needed to be banked,” she told me. “They knew it.”

In 2014, the Treasury Department’s Financial Crimes Enforcement Network published guidance intending to clarify “how financial institutions can provide services to marijuana-related businesses.” To prevent money laundering, the Treasury Department, which protects the financial system from infiltration by illicit money, advised banks to know their customers. In this case, the government said, they had to satisfy themselves that clients weren’t engaged in any of the prohibited activities in the Cole memo. And to comply with federal money-laundering law, they had to alert the department whenever money moved in and out of a marijuana business’s account. The agency, in turn, makes those reports available to law enforcement.

Most bankers did not take much comfort from the guidance, which could be retracted as easily as it was put forward, because read narrowly, it only explained how to report marijuana transactions to the government. It gave no assurance that banks would not face prosecution for money laundering. And not just money laundering: Partner Colorado’s lawyer warned Seefried that the government could also charge her and the credit union’s volunteer board with racketeering, a charge of criminal conspiracy that stiffens any penalties. “All he kept saying to me during my research was, ‘Sundie, there’s no safe harbor.’ ” The credit union’s accountant advised her to read Piper Kerman’s prison memoir, “Orange Is the New Black.”

Seefried, though, saw a way forward. Working off-hours at home with the blessing of Partner Colorado’s board, she outlined the steps the credit union could take to demonstrate convincingly that marijuana-business clients were complying with the Cole memo. She named her vetting program Safe Harbor Private Banking.

 Partner Colorado’s headquarters in Colorado, where Safe Harbor offices are located.CreditAngie Smith for The New York Times

Forget the hippie colonies up in the mountains. The epicenter of Colorado marijuana production lies in Denver’s north-side industrial district straddling I-70, where railroad spurs weave between warehouses, distribution centers and factories. Sharp-eyed visitors will quickly notice the signs of a cannabis facility: cameras over every entrance, hazmat signs and enormous HVAC systems. Avicenna and Green Sativa share a block with another licensed cultivation facility — a “grow,” in the crunchy slang that lingers from the underground days — and, according to Behzadzadeh’s employees, possibly an unlicensed one, too.

Avicenna is named for the Persian scholar who wrote “The Canon of Medicine” a thousand years ago. Behzadzadeh grew up in Iran, in a resolutely secular family; even as a boy, he couldn’t stomach the fundamentalist clerics brought to power by the Iranian revolution. In 1983, when he was just 15, he left Iran by himself to join an older brother in the United States, arriving with almost no money.

Behzadzadeh settled in Rhode Island, where he trained as a pharmacist. After seven years filling prescriptions, he found his way into software consulting and got rich before concluding that encroaching global consultancies would eventually swallow his business. At the time, Colorado was drafting the regulations governing the sale of recreational marijuana. “I knew that this is a business of compliance before it’s anything marijuana,” Behzadzadeh said. “I did not have a problem following the rules and regulations in pharmacy, so this would not be that difficult.”

State and often local requirements govern every aspect of Colorado’s marijuana trade to ensure safety and that no plant is grown or sold outside the licensed system, where it could evade taxation or end up in the hands of people not allowed to have it. Behzadzadeh led me to Avicenna’s extraction room, where butane, under high pressure, is used to separate the psychoactive chemicals of cannabis from its leaves; Behzadzadeh, per Denver Fire Department regulations and at great expense, made the room blastproof. Next we stopped at the safe where he’s obliged to store the drugs and any cash on hand at day’s end. A few feet away, a young woman named Angel wielded a tool resembling a dental pick to pack small plastic vials with a sticky extract called wax, using a state-inspected scale, and a young man applied state-designed product labels onto state-mandated opaque plastic bottles. Other young men — apart from Angel, they were all men — supervised extracts baking in specialized ovens. In Behzadzadeh’s office, we could watch all the activity in the building, including ourselves, watching all the activity, from 16 recorded camera feeds on a 50-inch monitor behind his desk. Another monitor over the couch displayed his dispensary 10 miles away in Federal Heights from four perspectives.

But for all the regulatory rigor, the flux of cash requires adjustments on the fly that no business with a checkbook, let alone a line of credit, would have to face. That week, for example, Behzadzadeh hoped to parcel out his $22,000 payroll on Thursday. But the satchel was a little light. He had given a contractor $17,000 as a down payment on a new roof for his grow, which he was in the process of expanding. And a concentrates customer found itself short on cash, so Behzadzadeh agreed to split the product with the client and forgo a $7,000 payment. There was money in the safe at the dispensary, but nobody had time to go pick it up.

So it was not until Friday morning that Elsberg walked into the office and pulled four thick envelopes from his jacket pocket containing $18,299.13: four days’ worth of sales at the dispensary. Each envelope bore the day’s total — the money had already been counted at the store, twice — but now Elsberg sat down at Behzadzadeh’s big leather chair and pulled the cash out of an envelope. At one point, a loose note fluttered to the floor, blown by the ceiling fan.

When Behzadzadeh finally sat down to disburse the payroll, it was after 5 p.m. He lugged a large vase full of change (the “genie bottle”) over to the couch, retrieved from the satchel 22 thousand-dollar bundles, plus a big stack of small-denomination bills that he’d been collecting all week, and then laid it all on a cushion beside him. The first pay stub showed $932.81. Behzadzadeh took a thousand-dollar stack, peeled off a $100, which went into a new pile, and collected $32 from the small-bill stack. Then he reached into the genie bottle to retrieve the change, folded the stub and put it in an envelope with the cash.

Walking out into the Friday twilight, very few of Behzadzadeh’s employees probably gave much thought to the wad of cash in their pockets. But everyone in the business can recall one or another infamous crime — clerks forced to open a safe at gunpoint in a dispensary on East Colfax; the murder of a security guard in Aurora — and some spectacular heists have gone largely unreported, as when thieves broke through the roof of one grow and then cut open its safe. For these businesses, robbery poses an existential threat. The money is often gone — insurance to reimburse the loss is, naturally, expensive — replaced, potentially, by new costs for tighter security or tougher regulations or, in the case of a store, by damage to its veneer of safety. All of Behzadzadeh’s cameras at Avicenna couldn’t have protected his satchel from intruders with guns. “It would only take one really effective rip-off gang,” Walsh, the former U.S. attorney, says, “to terrorize that industry.”

Applying for a Safe Harbor checking account is an invasive procedure. The credit union first tries to learn as much as it can about the company and its owners, beginning with an hourlong interview, followed by the document collection that Behzadzadeh found so aggravating: lists of owners, investors, vendors and customers; financial statements and tax forms; the business’s organizing documents; state licenses; leases, handbooks and more. The documents can multiply quickly, because marijuana businesses are often a web of affiliated companies with overlapping ownership. Each often gets its own bank account.

Once the accounts are opened, Safe Harbor’s bankers inspect the business and its premises as frequently as every three months, to confirm that it hews to all of Colorado’s rules. Treasury’s guidance implies that a bank can’t properly make sure that a client stays on the right side of the Cole memo without a rigorous state licensing and regulatory plan in place, according to McVay, the Seattle lawyer. This, he says, explains why California’s large medical-marijuana sector mostly lacks access to banking services: Local governments oversee the business, and with a very light touch. The state won’t implement comprehensive regulations until later this year at the earliest.

Safe Harbor bankers spend most of their time monitoring client transactions, tying every dollar the bank takes in to a legitimate sale and making sure that no dollar withdrawn disappears into the illicit economy. Each month, they reconcile the account activity to a company’s ledger and the sales it reports, as well as to all the other information they’ve gleaned about a client, such as which companies it normally trades with. The credit union has compiled reams of data about how money moves around the marijuana industry, and bankers regularly compare notes about the transactions they see. When an unusual deposit arrives — larger than typical, say, or from a new source — the banker holds the money until the client can account for it.

Seefried recalls how a banker noticed that one dispensary seemed to have customers with unusually deep pockets: its sales averaged $300 to $400 each, while medical-marijuana patients generally spend less than $100 at dispensaries. The banker interrogated the client and, from the parking lot, even staked out the dispensary and studied its customers. In the end, still mystified by how the dispensary made its money, Safe Harbor closed the account. “You cannot bank what you don’t understand,” Seefried says.

Safe Harbor has closed three other accounts after members broke various credit-union rules, indicating that they weren’t willing to be fully transparent with their bankers. Late last summer, Seefried ejected three more members after bankers, working with money-laundering experts, detected suspicious activity. And another three closed their accounts rather than comply with her increasingly strict requirements, including one that customers deposit 90 percent of their receipts. The rule, she acknowledges, was mainly intended to weed out less-committed clients: Only a business trying to hide its transactions would be put off by it.

Last June, the National Credit Union Association, Partner Colorado’s federal regulator, conducted its annual examination of the credit union’s books and practices, and for the third year in a row, had no complaints about Safe Harbor. Today the program consists of 13 people, including five responsible solely for compliance. Most are women. (Women manage more than half of all credit unions.) When Seefried hires bankers for Partner Colorado, she gravitates toward sociable people. For Safe Harbor, she says she prefers introverts or, at the very least, people who evince precision and curiosity.

This sort of meticulous banking isn’t cheap. For each $100,000 deposited at Safe Harbor, a client pays $450 in fees in the first year and $300 thereafter. (Client companies that serve the marijuana industry but don’t actually sell the drugs, like laboratories, require much less vetting and so pay much lower fees.) Seefried says the Safe Harbor program made a modest profit in its first year — less than $200,000. It became much more lucrative for the credit union in 2016, but Seefried won’t reveal specifics. According to federal data, most of the institution’s sources of income have stayed relatively steady since 2014, but fee income has grown to a projected $5 million in 2017 from nearly $3 million.

Seefried says that about three-quarters of Safe Harbor’s marijuana-selling clients pay less than $1,000 a month per account, considerably less than they would pay at banks, where monthly account fees are said to start at $1,500. Many observers assume that the opportunity to assess lucrative fees is what entices small banks to take on these risky accounts. Federal data show that at Champion Bank, in suburban Denver, which began explicitly working with marijuana businesses in 2014, annual fee revenue on deposit accounts increased by a factor of 68 from 2013 to 2016, to $752,000 from $11,000, even as its main line of business, providing loans, shrank. At Colorado Bank and Trust in La Junta, fees grew elevenfold to $2.9 million.

For marijuana businesses, engaging with the financial mainstream has kept them mostly free from legal trouble. Safe Harbor has received subpoenas for the bank records of only four of the just over 200 clients it has had. None has yet been indicted. John Walsh can recall prosecuting one case against regulated dispensaries and none against a business serving the industry. But working without a checking account makes even an otherwise law-abiding business look evasive, says Lewis Koski, who served as the first director of the state’s Marijuana Enforcement Division, which collects marijuana taxes and regulates the industry, before he joined Andrew Freedman in a consulting venture. A cash-management technique like personal deposits structured to evade notice can legally amount to money laundering. “Banking,” Koski says, “just provides a really clear picture of where money is coming in and where money is going out.”

An employee refills a container at Green Sativa.CreditAngie Smith for The New York Times

On the last Wednesday of last March, Kim Oliver, Partner Colorado’s executive vice president, pulled her old, mud-streaked silver Jetta into Avicenna’s parking lot. She had come from her ranch, east of Denver. She was dressed formally and seemed intently focused on the business at hand. Seefried had reviewed all of Behzadzadeh’s paperwork; now only an inspection stood between him and a bank account. Behzadzadeh gave Oliver a warm welcome, and Elsberg took her ID, signed her in and gave her a visitor badge. Oliver made a mental note: the first small compliance test, passed.

Oliver, who is 59, has worked in credit unions all her adult life. Earlier she had confided to me a lifelong hostility to marijuana and rage when she discovered that her son-in-law, a veteran suffering from PTSD and living in her house, was cultivating a small crop in her basement. But working on Safe Harbor had forced her to reconsider her views on medical marijuana. “I found out that he wasn’t blowing smoke,” she told me. (I couldn’t tell if she intended the pun.) “That was my whole thing: You’re just trying to have an excuse to smoke dope.” She now supplies her arthritic mother with topical creams that contain cannabidiol, a chemical compound in the marijuana flower that doesn’t produce a high but that medical-marijuana advocates believe reduces inflammation.

Oliver sat down with Behzadzadeh and Elsberg at a gray marble table in the kitchenette just inside the employee entrance. She began the formal inspection by going through a checklist: six pages long, scores of questions. The first series delved into Behzadzadeh’s financial practices and the second into business procedures. These were meant to assess Behzadzadeh’s compliance with state regulations. Then she read five or six questions about each of the eight Cole memo priorities. After a response, Oliver made a check — almost always “yes” — and sometimes wrote a little note beside it. “If you had an employee, and they cut a bud off,” she asked at one point, “how would you catch who did that?”

“Cut a bud off” — the phrase in Oliver’s Great Plains twang was disorienting. One of the incongruities in Colorado’s marijuana business is how professionals new to the trade adopt the Mendocino idiom without either irony or any particular reverence, the way their clothes absorb the plant’s scent after a few hours on site. The industry’s brand-builders prefer more sanitized language when talking to the public: “adult use” for “recreational” and “cannabis” for “marijuana.”

Elsberg replied, “That’s the beauty of it — we have cameras on everything.” The questions, and especially the answers, occasionally delved into minutiae, as when Behzadzadeh noted that he had hired a man to drive the perimeter of his two buildings hourly every night. Oliver raised an eyebrow. “He’s legal,” Behzadzadeh said. “I checked his sosh” — Social Security number. “I checked his driver’s license.” He deadpanned, “I sent a copy to Jeff Sessions, too.”

Next, Oliver went about documenting compliance, snapping photos of the cameras, the safes, the locks on cabinets and other equipment, the bars blocking the windows and even the eyewash station. She walked over to a bakery-bun rack and photographed the RFID tag lying next to a brittle sheet of an extract known as shatter. Then she had an employee type the tag number into the state record system to call up that batch’s history. She visited the grow next door (“I’m surprised they have as many cameras that they do,” she remarked approvingly afterward) and then followed Behzadzadeh and Elsberg up to the dispensary in Federal Heights.

The dispensary inspection got off to a rocky start when Oliver noticed the A.T.M. near the entrance. Cash-machine companies often rent them to dispensaries and stores, because so few can accept credit cards, but Behzadzadeh owned his and each week filled it with $2,000 in cash taken from the register. “That’s got to change,” Oliver said matter-of-factly. “The biggest way of laundering money is through the A.T.M.”

Behzadzadeh’s machine was tied to a personal bank account; every time a customer withdrew cash, that account received a credit. But the register money was unaccounted for; it could come from anywhere. Now, Oliver told him, he would have to withdraw money from Safe Harbor and hire an armored car to deliver the cash and fill the A.T.M.; he couldn’t even touch it himself.

A look of incredulity crossed Behzadzadeh’s face. “Wait — I’m not going to give my business to somebody else!” he said. As a start-up entrepreneur, Behzadzadeh nursed a swelling grudge against the contractors and vendors who nickeled and dimed him, he thought, at every turn — maybe even Safe Harbor. The cost of banking was one thing, but the prospect of trading the satchel for an armored car from a company like Blue Line, another niche player that charged a premium in a niche industry, especially galled him. “I have no problem doing business with you guys, and I appreciate the banking, but I’m not going to pay Blue Line to take my money,” he said, his voice rising. “There’s no way.”

Oliver kept pressing. “All they’re doing is loading the machine for you,” she said. “If I wanted to be on the black market, I would come in here and fill this machine all the time to clean the money.”

“Ah,” Behzadzadeh said. Now he understood. He thought out loud: He would bring cash from Avicenna to the dispensary and give it to a courier, who would put different cash, which he had brought with him, into the A.T.M. “While you’re doing that” — Behzadzadeh addressed the imaginary courier — “I’ll make you coffee.”

Behzadzadeh’s dogs were barking ferociously when he and his wife returned home from dinner late one night in September. They didn’t think anything of it, but several hours later, the couple heard noises in their house. Behzadzadeh gathered his wife and children in a bedroom and raced downstairs with a laser-sighted pistol. But the intruders were gone, along with his cellphone — and the satchel.

The robbery could have been a financial disaster. A month earlier, the Denver Fire Department had determined that the extraction room at Avicenna was not sufficiently blastproof, shutting down the factory for two months. “If they had taken $30,000 or $40,000,” Behzadzadeh said, “it would have literally broken my back.” But the satchel held no money that night. Behzadzadeh had opened his bank accounts the morning after the inspection. It had taken him a few months to fully embrace them — Seefried had predicted as much — but now around two-thirds of his trading partners also accept or write checks. What cash remains in Behzadzadeh’s business waits in safes, secured to the floor, for the armored truck.

Yet despite Safe Harbor’s efforts and those of its competitors, bank accounts remain out of reach for many Colorado marijuana companies. The high fees put off smaller businesses at the same time as banks seem to be pulling back. Seefried didn’t want Safe Harbor deposits to swamp the credit union, so last January she reduced the number of new monthly clients from five to three and then closed the door altogether in August after deposits ballooned over the summer. As the state Marijuana Enforcement Division granted licenses to about 220 additional companies last year through November, Safe Harbor’s waiting list swelled to 96 businesses, or two-and-a-half-years’ worth of new clients, before the credit union stopped adding names to it. The five banks have become very stingy about granting new accounts, according to three C.P.A.s who have marijuana-industry clients. The parent company of one of those institutions, Colorado National Bank, declared bankruptcy in November, putting its future as a marijuana banker in doubt.

Marijuana banking has always depended entirely on forbearance from Washington, and the Trump administration seems decidedly less tolerant than its predecessor. In March, Attorney General Jeff Sessions declared before a gathering of law-enforcement officials that marijuana is “only slightly less awful” than heroin. “I reject the idea that America will be a better place if marijuana is sold in every corner store,” he said. A task force assembled in February by the Justice Department to combat violent crime didn’t recommend any changes to the Cole memo when it delivered its initial findings last summer, but the agency is very likely revising it. (The Justice Department wouldn’t comment on its deliberations.) [Update: After this article went to press, the Justice Department rescinded the Cole memo, giving U.S. attorneys more latitude to enforce federal marijuana laws in their districts.]

Seefried had hoped to begin making loans to and processing credit-card transactions for Safe Harbor’s existing clients, but for the foreseeable future, she has put those plans on hold. Until federal law catches up to public sentiment, marijuana banking is unlikely to keep pace with the industry — the vetting is too expensive. Just last month, after a client was caught up in a police investigation, Safe Harbor had to review the account to make sure bankers hadn’t missed any suspicious activity. “It cost me $30,000: $20,000 to bring in investigators for three days and $10,000 for legal fees,” Seefried told me. “That’s one client, with one problem.” She plans to raise fees in the next couple months.

Yet she still hopes to position Safe Harbor as a model for banking the marijuana industry elsewhere. In November, Safe Harbor began licensing its name and protocols to financial institutions nationwide. Six banks and credit unions in six states will begin taking on customers this month, including a credit union in Colorado to serve the customers that Safe Harbor no longer can. Three more will join each quarter. Safe Harbor is also testing a mobile-phone app for buying marijuana in Hawaii’s handful of state-licensed dispensaries.

In June, the National Credit Union Association, Partner Colorado’s regulator, advised Seefried that it would begin examining the institution quarterly rather than yearly, which she attributes to the national expansion. She has hired two full-time employees just to manage the increased compliance. “We are bringing more credit unions to the table, and they don’t want us teaching them incorrectly,” she says.

One industry investment facilitator, the Arcview Group, estimates that legal marijuana sales in the United States will more than double to roughly $21 billion by 2021 from nearly $9 billion last year. Walsh, the former prosecutor, has concluded that the tension between the federal government and liberalizing states is unsustainable. “I came in as U.S. attorney in 2010 assuming that it was my job to enforce the federal marijuana laws regardless of what state legalization efforts would look like,” he says. “The longer I worked on the issue, and we struggled with it, the more I realized that a simple shut-it-down approach was not practical. The notion that you can put this genie back in the bottle today is not realistic.”

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