MBank Moves Out of Servicing the Colorado Cannabis

ill MBank start to service
cannabis entrepreneurs in Colorado like their recent announcements note?

The answer is no. MBank has officially pulled out of Colorado.

Last week, MBank
was offering financial services to cannabis businesses, but now it seems they have rescinded their offer – citing lack
of resources to handle the overwhelming response – according to the Denver
Post.

But experts are saying that federal banking regulators pushed the
move late last week by telling MBank executives that working with an industry
that is still illegal under federal law was too risky.

“Following national press, the volume of
inquiries in Oregon, Washington and Colorado has been so overwhelming that we don’t
currently have the infrastructure to adequately support all these
customers,” MBank CEO Jef Baker said Monday. “Colorado is the
farthest from our market area and the most difficult to provide the quality
customer service to.”

“We’ve
become accustomed to our banking solutions not actually working out,” said
Michael Elliott, executive director of the Marijuana Industry Group.
“After they got all that press, I was wondering if they’d get increased
scrutiny and pressure as a result — just like all the other banks have.”

Legal cannabis vendors have often complained about their accounts
being closed after their banking becomes public. “This
is exactly the reason why the marijuana industry cannot say who they have a
bank account with, and why the banks don’t want it public,” Elliott said.

Baker evaded questions about whether it was the FDIC who
pushed MBank out of Colorado. “We are regulated by the government, and the
expectation is that we run our bank in a safe and sound manner. In the event we
don’t, we face severe repercussions from our regulators,” Baker said.
“Certainly regulators influence our decisions, but ultimately it is our
call.”

Another reason is because MBank
doesn’t have a Colorado branch and would need to get approval from state
banking authorities in order to do business.

What about Oregon and Washington?

MBank will still serve legal cannabis
businesses in Oregon and Washington

CULTURE
Magazine talked exclusively with MBank today, clarifying
what they meant by ‘financial services’, and we got an answer.

The manager, who will remain anonymous, told us that
no banks in the United States are offering loans for cannabis vendors, but they
do offer “extensive depositories, debit cards, and checking” just like any
other business, albeit highly risky. If a cannabis merchant were to open up a
depository with any bank, they would need precise paper work to track all of
their transactions and cannot accept credit from customers.

Anyone that wants to sell some “green” better come
up with their own green, because big banks aren’t having it. They’ll take it,
but they won’t dish it out.