Wells Fargo & Co. — which medical-marijuana dispensary owners say is virtually the only bank in Colorado willing to take their business — has stopped opening new accounts for dispensaries.
Cristie Drumm, a spokeswoman for the banking giant, said Wells Fargo is examining state and federal laws to determine what the bank’s risk is in working with dispensaries.
“We’re not actively opening accounts with these businesses at this time,” she said.
The move reflects a broader uneasiness among banks in the state about working with the medical-marijuana industry, and it marks one more cloud hovering over dispensaries. Though Drumm said she was unsure whether the bank would also re-evaluate its existing dispensary accounts, news of Wells Fargo’s change in attitude has dispensary owners worried they might lose a key ally in their business plans.
“We wouldn’t have a bank to put our money in,” said Ryan Vincent, who owns The Health Center in Denver. “I don’t know what we would do. We’d probably have to start rallying to put together a credit union.”
Vincent said every dispensary he knows of uses Wells Fargo as its bank, largely because the industry has received a cold shoulder from other financial institutions. While Vincent said he understands the bank’s need to do what’s best for its business, he said shutting out dispensaries would deprive the bank of needed customers and deprive dispensaries of needed stability, possibly forcing them to operate in shadowy, cash-heavy ways.
“It’s interesting to see that there’s money and no one wants to hold onto it,” Vincent said. “We’re trying to be a legitimate, above-board industry in Colorado.”
Tim Powers, a spokesman for the Colorado Bankers Association, agreed that it’s unusual for banks to turn away potential customers, but he said legal and regulatory considerations have made many banks uncomfortable working with dispensaries. Federal law requires that banks not do business with companies operating illegally, and marijuana distribution — for medical purposes or not — is still illegal federally.
“Regulators are basically saying, ‘Approach this with caution. There could be problems,’ ” Powers said. “Because of that, a lot of banks are taking the ultra-conservative approach.”
“There’s just lots of unknowns in this new emerging field of business.”
That’s true for dispensaries as well as banks.
“We wake up every morning with a new thing thrown at us,” Vincent said.
By By John Ingold