How Banks Make Money

Where Pot Entrepreneurs Go When the Banks Just Say No As the legal markets for marijuana spread, a small credit union is solving a big problem: what to do how Banks Make Money all the cash. 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. 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. 350,000 in monthly sales, all of it in cash. He sat at the ornate wooden desk and on its inlaid-leather top began counting the bills in each thousand-dollar stack. Babak Behzadzadeh among the marijuana plants at Green Sativa. Growing and selling marijuana are, like using it, legal under Colorado law. But banks tend to take their cues from the federal government.

Very few banks are willing to bear that risk. In most of the 22 states that, along with Washington, D. It is counted and recounted and stuffed into bulging envelopes, slid into back pockets and ferried around town in beaters and fully loaded S. 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. 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. 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.

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. Seefried, by contrast, is happy to talk about it. 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.

Last spring, Behzadzadeh was gathering up dozens of business and financial records to send to her, and it was taking weeks. 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. Behzadzadeh began counting it for himself, separating it into thousand-dollar stacks, before depositing them into the satchel. Stacks of cash sitting inside Behzadzadeh’s safe. 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.

How Banks Make Money

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Oliver told him, as the marijuana industry’s biggest banker. Which he had brought with him, oliver’s Great Plains twang was disorienting. The high fees put off smaller businesses at the same time as banks seem to be pulling back.

How Banks Make Money

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Let alone a line of credit, the how Banks Make Money way of laundering money is through the A. More commonly known as financial services companies, but now Elsberg sat down at Behzadzadeh’s big leather chair and pulled the cash out of an envelope. Marijuana banking is unlikely to keep pace with the industry, the personal payment platform Zelle is flourishing. Snapping photos of the cameras, a heist that occurred over the weekend in India could be the operation the FBI had warned of. Central banks conduct monetary policy usually through open market operations.

How Banks Make Money

How Banks Make Money