When your business is serving cannabis companies, just keeping a bank account is tricky
Offit Kurman Attorney Darren Weiss Featured in the Washington Business Journal
As a financial data analytics firm, D.C.-based New Frontier Financials tracks everything from marijuana sales figures to state legalization initiatives to build market intelligence reports for potential cannabis investors and operators.
One thing the company has never done? Work directly with marijuana itself.
"We literally have nothing to do with the plant," said Giadha De Carcer, New Frontier founder and CEO.
And yet, since the company started up in 2014, it said it has been dropped without explanation from its previous two banks, both national names. "You can imagine how crazy it is when it comes to payroll and just doing business," said De Carcer, who declined to name her current bank.
Some major banks have shown serious wariness when it comes to offering checking or savings accounts for companies that just service the marijuana industry, regardless of whether they work with the plant directly. Banks say their hands can often be tied by strict regulations that put their operations at risk. But it remains a core problem that has held back plenty of companies in the otherwise fast-growing marijuana business — New Frontier estimates in the District alone, it will grow to a $120 million industry by 2020.
"Absolutely, it is an issue for our clients," said Darren Weiss, co-founder of Offit Kurman's cannabis practice in Bethesda. "If you are getting the majority or all of your revenue from cannabis companies, that could be a problem for you."
It's a common problem nationally. Even those that successfully open accounts can suddenly lose them, leaving them scrambling to cut checks to vendors, employees and even the government to pay taxes, said Taylor West, spokeswoman for the National Cannabis Industry Association. "Their business may be going along fine and then, all of a sudden, they have their account pulled from them without any review process," West said. Click here to read the full article
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