Every medical marijuana provider in the state has a story about the workarounds they engineer to run a cash-only business that’s illegal under federal law.

Rod and Debra Lambert of CannOrganics in Fort Peck appreciate that the state accepts quarterly tax payments in the form of mailed money orders, saving them 14-hour round-trip drives to the Department of Revenue’s Helena dropbox.

Ben Zeimet, who owns Missoula’s new Green Tree dispensary, pays everyone from his accountants to his electricians in cash.

Green Tree’s neighbor, Flower dispensary owner Bobby Long, says he fielded a call from a Brooklyn financier claiming he could score the dispensary an FCC-compliant reverse ATM linked to an Irish offshore account; Long declined.

Marijuana providers nationwide are paranoid about federal agents raiding their businesses and hauling off their livelihoods, but because Montana banks won’t work with Montana marijuana businesses, local providers also have to worry about criminals.

“It’s unsettling when everyone knows you’re sitting on a pile of cash,” says Shelly Hall-Crobar, a compliance consultant for dispensaries.

Hall-Crobar is also the coordinator of the Montana State Hemp and Cannabis Festival and says the organization’s bank account was shut down months ago after two years of operation. Hall-Crobar says the account wasn’t connected to medical marijuana money, but that banks are just that nervous.

Donya Parrish, vice president of risk management for the industry group Montana’s Credit Unions, says Hall-Crobar is not alone. She says credit unions decline to serve medical marijuana dispensaries until more precise state and federal guidelines are published, but that it’s tangentially related businesses like soil sales that they’re more confused on how to handle.

“I’m definitely getting more calls [from confused credit unions] in the last six months than I have in the last six years,” Parrish says.

Since marijuana remains federally illegal regardless of state laws, banks consider marijuana money too high a risk to take — at least in Montana, where the government has declined to provide assurance of support to the industry.

In Washington, the state government asked state-chartered banks and credit unions to hold marijuana businesses’ cash (amounting to more than $1 billion in sales in 2016 and 2017) as a matter of community safety, and has pledged to back the industry against federal interference. Other states have similar arrangements.

Montana has made no such request of its financial community and offered no such defense to federal interference.

“We still have the dichotomy. We don’t have a safe harbor and we have a non-statement from the state authorities,” says Steve Turkiewicz, president and CEO of the Montana Bankers Association.

CannOrganics’ Rod Lambert appreciates that the state has finally built a safe system with well-defined rules at the behest of voters, but says the state needs to stand with medical marijuana businesses.

“They want our money, they take our money, and they’re just as much a part of this as we are,” he says.

Montana voters have had to drag state government into the legalization of medical marijuana since passing an easily exploitable program on the 2004 ballot that legislators did not regulate. When the program inevitably got out of hand, the 2011 Legislature passed a quasi-repeal instead of reforms, which cut off 93 percent of patients upon implementation in 2016. Voters resurrected the program on the ballot a few months later — this time requiring the state to regulate it heavily — but despite notable progress, the state has missed implementation deadlines and the system had a soft launch without all the regulations in place.

Some Montana banks and credit unions may be quietly working with medical marijuana providers. The state Department of Revenue doesn’t track whether payment sources are tied to bank accounts.

Last week, Tracie Kenyon, president of Montana’s Credit Unions, surveyed the state’s credit unions to determine how many are servicing medical marijuana clients. Of the 35 credit unions that responded, only one held such an account, which was grandfathered, having opened before the credit union stopped working with marijuana businesses. Kenyon says the credit union didn’t want to be identified. Kenyon said several other Montana credit unions expressed interest in serving medical marijuana providers if regulatory issues could be settled.

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Lack of clarity on the federal legality of marijuana-based business leaves Montana providers unable to use banks and credit unions. “It’s unsettling when everyone knows you’re sitting on a pile of cash,” says Shelly Hall-Crobar, a compliance consultant for dispensaries.

“We would like some really good rules at the state and federal level so that these businesses can be served,” Kenyon says.

A U.S. Department of the Treasury bureau called the Financial Crimes Enforcement Network, abbreviated FinCEN, knows how many Montana banks work with marijuana businesses, but isn’t telling.

In 2009 and 2013, President Obama’s Department of Justice released the Ogden and Cole memos, respectively, which informed state governments that the DOJ would not indict medical and recreational marijuana providers and patients as drug dealers and users so long as they followed state law, giving states the impetus to regulate their programs. In 2014, FinCEN released regulations clearing depository institutions (banks and credit unions) to hold legal marijuana money so long as they ensured their clients were following the spirit of the Ogden and Cole memos.

FinCEN began tracking depository institutions holding “marijuana-related business” money nationwide, which grew from zero in 2014 to more than 400 by April of this year, and denied a Freedom of Information Act request by the Independent for how many of those institutions are in Montana, citing confidentiality provisions of the Bank Secrecy Act.

The Ogden and Cole memos and FinCEN guidelines were never more than bureaucratic checks on federal interference with state marijuana laws, not legal checks applicable in court. Medical marijuana patients and providers are protected from indictment under the Controlled Substances Act by an amendment attached annually since 2014 to trillion-dollar budget bills by Orange County Republican Congressman Dana Rohrabacher, but recreational businesses and customers have no such protections.

U.S. Attorney General Jeff Sessions’ January revocation of the Obama-era memos seemed to threaten the legalization movement, but the threat was empty. The Rohrabacher amendment was passed again in March. Attorneys general in several legal marijuana states vowed to defend the industry against federal intrusion, and some federal prosecutors have pledged not to pick fights, continuing deference to the memos’ guidance. Montana’s attorney general and U.S. attorney have avoided the question.

But Sessions’ move caught the Treasury Department off guard, causing panic in the marijuana and banking communities until FinCEN released a statement saying it, too, would continue to follow the memos and maintain its 2014 guidelines.

When Sessions revoked the memos, he also picked a fight with Republican Sen. Cory Gardner of Colorado, a state that legalized recreational marijuana in 2014, spurring the Cole memo. Gardner took advantage of Republicans’ slim Senate majority to block some of President Trump’s DOJ appointees until the president — never an anti-marijuana ideologue like Sessions — promised to fix the disconnect between state and federal marijuana laws.

That fix has metastasized in the form of the STATES Act, a bill sponsored by Gardner and other pro-marijuana senators that would directly amend the Controlled Substances Act to exclude from prosecution those following state marijuana laws and, most important for the banking industry, specify that “proceeds from any transaction in compliance with this Act and the amendments made by this Act shall not be deemed to be the proceeds of an unlawful transaction.”

Trump said in June that he “would probably support” the STATES Act, but presidential approval has yet to budge key Republican congressional committee chairs who have blockaded this and previous efforts to reform federal marijuana law.

In a June 21 Senate Appropriations Committee meeting, Montana Sens. Steve Daines and Jon Tester voted against a Rohrabacher-style budgetary amendment that would have prevented the Treasury Department from penalizing banks for working with marijuana businesses that follow state law. Both Montana senators have B+ ratings from the National Organization for the Reform of Marijuana Laws and have supported patient access and states’ rights to set their own marijuana laws.

Tester’s office says he opposed the amendment because it addressed only Treasury regulations, not DOJ regulations, and would have to be renewed annually.

“Business owners who are trying to make a living and provide Montanans with safe access to medical marijuana should be able to bank at their local lender. Congress must do better than short term solutions for Main Street businesses, they need long term certainty,” Tester said in a press release.

While the STATES Act would address those concerns, Tester’s communications director said the senator is reviewing the bill and has not taken a position on it.

According to a spokesperson, “Senator Daines supports states’ rights to determine whether marijuana should be legalized for medical purposes.” Tester’s Republican challenger in the November election, Montana state auditor Matt Rosendale, voted to repeal Montana’s medical marijuana program in 2011. According to a campaign spokesman, “Matt believes the decision to legalize medical marijuana is a states’ rights issue.” Both Republicans declined to comment specifically on the STATES Act.

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