For legalized marijuana, banking woes persist

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Nearly three years after Missouri voters legalized medical marijuana across the state, the cannabis industry in St. Louis appears to be thriving, with state-regulated dispensaries popping up throughout the region. But managing the money side of things has proven a struggle for many distributors and growers — even though their businesses are fully legitimate. That’s because many banks won’t accept their money, or insist on charging them significant fees if they do.

“It’s not that banks are not allowed to bank in that space,” St. Louis-based accountant David Smith explained to St. Louis on the Air. Rather, they’re held to “a higher standard of documentation” for doing such business — much like cannabis businesses themselves. And that’s thanks to federal regulations, which still list marijuana as a Schedule 1 drug.

Smith, who is the owner and president of Smith Patrick CPAs, has sought to be a source of encouragement and guidance for new St. Louis cannabis businesses, helping them manage their operations and cash in transparent and above-the-board ways.

“As [medical marijuana] came to Missouri, we were very proactive and wanted to support the industry,” he said. “But it hasn’t been without concerns, pitfalls or risk.”

Even some businesses outside the emerging industry are seeing impacts. After running a cannabis-related ad in a recent issue of his St. Louis-based magazine Sophisticated Living, publisher Craig Kaminer received an alert from Enterprise Bank & Trust that the magazine would need to pay a monthly fee of $500 to continue banking there.

“They said, ‘Because even people like you who are not really dispensaries or growers, because you do business with cannabis companies, we have to charge a $500-a-month fee to audit your banking, and that’s to cover our costs for having a new compliance officer just to follow the cannabis industry,’” Kaminer recalled. “I said, ‘Well, I’m generating about $1,500 a month in advertising [from the cannabis client], and you want me to pay $500 of the $1,500 for you to audit me?’ I said, ‘I can’t do that. I’d be losing money. This makes no sense to me.’”

Kaminer has since identified other banks willing to forego such fees. He is currently weighing his options.

On Friday’s talk show, we’ll hear more from Kaminer. And host Sarah Fenske will sit down with Smith for a closer look at the larger issue — and at a federal bill that, if approved by the U.S. Senate, could be a game changer.

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