Wednesday, March 26, 2014
Banks in and around White Salmon will not yet be opening their doors to the multiple local businesses that have applied for licenses to sell, process, or produce marijuana.
The Financial Crimes Enforcement Network (FinCEN), which is a bureau of the U.S. Department of the Treasury, recently released guidelines meant to provide financial institutions with ways to provide services to marijuana businesses in states like Washington and Colorado that legalized the recreational production and sale of marijuana for adults.
Voters in Washington passed Initiative 502 in late 2012 placing the responsibility of the licensing and governance of recreational marijuana sales in the hands of the Washington State Liquor Control Board.
Even though marijuana use was legalized with the passage of I-502 in Washington, the Drug Enforcement Administration (DEA) still classifies it under the Controlled Substances Act as a schedule I controlled substance, which are, according to the DEA website, those “with no currently accepted medical use and a high potential for abuse.” As a schedule I controlled substance, marijuana is listed next to heroin, LSD, ecstasy, and peyote, making it illegal under federal law to manufacture, distribute, or dispense.
The federal government’s view of marijuana combined with the thousands of license applications pending with the WSLCB to produce, process, or sell marijuana left potential business owners in a predicament, leading to many facing the idea of being an exclusively cash business when the time comes for full operation.
That conundrum led to the handing down of the FinCEN guidelines, which stems from a memorandum from Deputy Attorney General James Cole, otherwise known as the “Cole Memo,” according to the official guidance provided by the Department of Treasury on Feb. 14.
Although the guidelines offer some advice on how financial institutions might take on conducting business with marijuana retailers, growers, or processors, they have offered little comfort to banks in Washington that could face potential intervention from the federal government.
“The general consensus is that these guidelines are just that, guidelines, but they aren’t law, therefore I find that most banks are reluctant to get involved with these businesses until federal law changes and says that they can do so,” said Jim Pishue, president of the Washington Bankers Association.
The Cole Memo lists multiple priorities banks would have to monitor if they began doing business with marijuana retailers or growers. Selling to minors, using funds to benefit gangs or cartels, using a marijuana business as a front for money laundering or the trafficking of illegal drugs, growing on public lands, or use of marijuana on public property are all listed as “Cole Memo priorities” that banks should be on the alert for if doing business with a marijuana retailer.
As soon as a bank would begin opening accounts for marijuana businesses, a “Marijuana Limited” Suspicious Activity Report would have to be filed because the funds from those businesses would still technically stem from illegal activity under federal law. The bank would then have to continually monitor the accounts for those marijuana-related businesses to ensure that no “red flags,” the extensive list of which is also included in FinCEN’s guidance, are being thrown showing the business might be violating one of the priorities listed in The Cole Memo.
If a bank becomes wary that one of its account holders is not complying with The Cole Memo priorities, a “Marijuana Priority” Suspicious Activity Report would have to be filed with FinCEN and additional investigations would have to take place on the behalf of the financial institution. If those suspicions turn out to be true, a “Marijuana Termination” Suspicious Activity Report would be filed and the bank would cease all business with the customer in question along with alerting other banks of the customer’s activity.
After speaking with members of the Washington Bankers Association, Pishue said the idea of undertaking such an effort to constantly monitor certain accounts is too great, especially for smaller institutions.
“It would take a very concentrated effort to make sure all of these marijuana-related customers are following each of these guidelines to a T. For many smaller banks that could get expensive because they would most likely have to hire somebody who would devote all of their time to making sure they’re following those guidelines issued,” Pishue said.
Local banks in the White Salmon area agree even if there is business to be had. As of March 11, the WSLCB listed Klickitat County as having 35 applications for marijuana production licenses, eight of which were in White Salmon, three in Lyle, three in Trout Lake and one in Husum. There were also 23 processing licenses applied for in the county, including seven in White Salmon, three in Lyle, and two in Trout Lake.
As far as retail outlets go, seven applications have been turned in for such an operation in Klickitat County, one of which is attempting to open in White Salmon, three in Bingen, two in Goldendale, and one in Lyle. All of the licenses listed as applied for in Klickitat County are still pending, according to the list provided by the WSLCB.
Only a few of those applicants will actually be able to open, however. The number of marijuana retailers has been capped at four in Klickitat County with one specifically for Goldendale and three at-large businesses that will be given licenses elsewhere in the county.
The WSLCB began issuing licenses this month, but will have to hold a lottery to see which applications for retail licenses in counties with caps, like Klickitat County, will be approved.
Brian Smith, spokesperson for the WSLCB, said no date has been set for the lottery.
Even with the guidelines that have been made available, Dale Connell, vice president and branch manager of Riverview Community Bank in White Salmon, echoed Pishue’s opinion that ensuring marijuana businesses follow the guidelines of The Cole Memo would be too great of an undertaking.
“The requirements as far as financial institutions are concerned would be onerous to say the least,” Connell wrote in an email to The Enterprise.
Mahlon Vigesaa, president of CenterPointe Community Bank in Bingen, said his bank is still unable to do business with any client that might not be following federal law after checking with the Federal Deposit Insurance Corporation.
“It is CenterPointe’s desire that we will eventually be able to do business with marijuana retailers just like any other business in our community. We have checked with FDIC and their opinion as of right now is that we still cannot do business with them until there is a new directive that comes out,” Vigesaa said.
Some lawmakers are aiming to change the laws that would eventually make it easier for banks to work with marijuana businesses. Congressman Denny Heck (WA-10) and Colorado Congressman Ed Perlmutter (CO-07) brought forth HR 2652, or the Marijuana Business Access to Banking Act of 2013.
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Parkdale third graders sing "12 Disaster Days of Christmas"
Welcome to your sing-able Christmas gift list. What follows is an emergency rendition of “12 Days of Christmas” – for outfitting your home or car in case of snow storm, earthquake, flood or other emergency. Read it as a simple list, or sing it to the tune of “12 Days” – you know, as in “ … and a partridge in a pear tree…” Not to make light of it, but the song is a familiar framework for a set of gift ideas that you could consider gathering together, even if the recipient already owns items such as a bunch of coats, tire chains and flashlights. Stores throughout the Gorge are stocked up on all these items. Buying all 12 days might be prohibitive, but here are three ideas for checking any of the dozen off your list (notations follow, 1-12.) The gift items needed to stay warm, dry and safe are also coded to suggest items in your abode (A) in your car (C) or both (B). 12 Gallons of Water (A) 11 Family meals (B) 10 Cans of propane (A) 9 Hygiene bags (B) 8 Packs of batteries (A) 7 Spare coats (B) 6 Bright red flares (C) 5 Cozy blankets (B) 4 Tire chains (C) 3 Flashlights (B) 2 cell phone chargers (B) 1 And a crush-proof first aid kit (B) Price ranges? Here’s a few quotes for days Three, Two, Four and Nine: n A family gift of flashlights (three will run $15-30, Hood River Supply, Tum-A-Lum) n Cell phone chargers (two will run $30-60) n Tire chains (basic set, $30, Les Schwab, returnable if unused for the winter) n Family meals ($100 or so should cover the basics for three or four reasonably well-fed days) n The home kit should be kept in a handy place near an exit, and remember that water needs to be replenished every few months. If you have a solid first aid kit already, switch out the gift idea with “and-a-sto-o-u-t- tub-for it-all …” Otherwise, it’s a case of assembling your home or car kits and making sure all members of the family know what the resources are and how to use them (ie flares and propane). Emergency situations are at worst life-threatening, at best deeply uncomfortable if you and your family are left without power for an extended period, or traveling and find yourself in a situation where you need to wait out a storm, lengthy traffic delay, or other crisis. Notes on the 12 gift ideas: 12 – Gallons of water: that’s one per person in a four-member family to last for three days, the recommended minimum to be prepared for utility outages. 11 – Easy-open packaged goods, energy bars, dried food and nuts are good things to include for nutrition. Think of what your family of four needs for three days to stay fortified and hydrated (see number 12). Can-opener also recommended 10 – If you have a propane camping stove, keep extra fuel handy. 9 – Hygiene bags: put packaged moistened towelettes, toilet paper, and plastic ties in large garbage bags (for personal sanitation) Resource list courtesy of Hood River County Emergency Management, Barbara Ayers, manager/ 541-386-1213. The county also reminds residents to Get a Kit, Make A Plan to connect your family if separated, and Stay Informed. See www.co.hood-river.or.us to opt-in for citizen alerts. Enlarge