With a surplus of cash and cannabis products always on hand, dispensary locations are prime targets for robbery. Washington state saw a number of cannabis shop break-ins in 2017 and the trend has continued in 2018, reinforcing concerns about having a cash-only industry and the lack of banking options for cannabis companies.
On April 5, the front door of retail shop The Highway Seven in Tacoma was smashed, but owners believe that security bars and the activated alarm scared away potential thieves. In late March, four thieves rammed a stolen Ford Taurus into the front of Have a Heart’s Greenwood location, pillaging shelves and making off with an unknown quantity of products. In September 2017, armed robbers entered THC Connections in Everett, WA, rattling employees and making off with cash. Just five days earlier, at a retail cannabis shop in White Center, an employee was shot and injured during a robbery. Three shops were broken into in Kitsap County in August 2017, but thieves were caught after a police chase.
Few banks risk working with cannabis
The Washington Department of Financial Institutions (DFI) regulates state-chartered banks in Washington. According to Roberta Hollinshead, Director of Banks at the DFI, there are only six state-chartered financial institutions — three banks and three credit unions — that will open cannabis accounts in the entire state.
“Cash-only businesses are high risk,” said Hollinshead. “Banks have to add additional resources to their compliance departments for monitoring cash-intensive and high-risk businesses. This is likely a deterrent for some financial institutions.”
Hollinshead says the DFI is open to solutions from banks or the Washington State Liquor and Cannabis Board, but uncertainty at the federal level will continue to be a problem.
Salal Credit Union in Seattle announced in 2014 they would open accounts for cannabis businesses. Today, they have three hundred accounts and are still accepting applications for new accounts in spite of the recent federal policy changes.
Carmella Houston, Vice President of Business Services at Salal, said, “We have fairly conservative requirements to open accounts; businesses must be professionally managed and above board in their business practices as well as have good credit. There is also an extra cost when you are a cash-only business, so this may be an extra expense some don’t want to incur in addition to the on-going monitoring that is part of our compliance program.”
Numerica Credit Union in Spokane County is another banking institution working with the cannabis industry. However, they also charge large fees due to the labor-intensive nature of cash-only businesses and accounts are limited to five million dollars. Numerica does not allow accounts for retail cannabis shops and is only serving producers/processors where their branches are located. Additionally, services like credit and debit cards, online bill pay, mobile banking, and access to Numerica financial products are still restricted for cannabis accounts.
Get daily news insights in your inbox. Subscribe