Jumping Hurdles: Credit Unions’ Role in the Legal Marijuana Industry
Two dozen checking accounts.
That's the number of accounts that banks and credit unions have closed once they discovered Kristi Kelly, founder of the Good Meds Network and board member for The Fourth Corner Credit Union, was associated with Colorado's newly-legalized cannabis industry.
That's the number of times access to traditional financial services has been yanked away from those who chose to participate in an industry that a majority of voters approved in 2012.
Forcing businesses like Kristi's to operate in the shadowy, cash-only fringes of society isn't a safe or sustainable solution. And, while arriving at a viable endpoint won't be easy, it's time for the credit union industry to step up and have a coordinated conversation aimed at developing an innovative solution to address this problem.
Dispelling Myths and Questioning Assumptions
Last month, Filene Research Institute arranged for Filene i3 innovators to meet with leaders from The Fourth Corner Credit Union to witness first-hand the environment in which Colorado marijuana dispensaries operate, and to engage in an objective dialogue aimed at finding solutions. For many of us, the myths and assumptions we had about the industry were dispelled before our eyes.
The dispensary we visited wasn't a smoky den with questionable customers lurking about. In fact, it looked like a normal retail environment where high-end electronics or jewelry could be sold. The owners and employees weren't the bloodshot-eyed slackers you might imagine; rather they were dressed professionally, some in suits that would put to shame the casual dress codes in vogue at many of our companies.
But the similarities between Colorado's legal dispensaries and other retail businesses end here. Because when it comes to accessing the financial ecosystem that most businesses take for granted – cashing checks, paying bills and ensuring that funds are safe and secure – these dispensaries are completely shut out.
And limited access to financial services isn't just impacting the recreational marijuana industry that is now legal in four states. Twenty-three states and the District of Columbia have laws that permit the regulated use of marijuana for medical purposes. Dispensaries and others involved in what they honestly believe to be legitimate medical treatment are forced into the same financial challenges Filene's i3 innovators saw.
Limitations Require Innovative Solutions
No one denies that significant hurdles stand in the way of The Fourth Corner Credit Union and others like them from opening their doors and serving their first member. Many of these hurdles are rooted in legitimate legal questions, the least of which is the standing federal ban on the possession of marijuana.
But hurdles are meant to be jumped. Problems are meant to be solved and the status quo is meant to be questioned. That's how the credit union movement got its very start in the early twentieth century. Restless leaders including Filene Research Institute's own namesake Edward Filene worked together to bring safe, fairly priced financial access to the most marginalized of Americans.
“We cannot release great new forces in our world and hope to retain the status quo,” was how Edward Filene characterized the need for change in the 1930s. Similarly, today our movement must work together to bravely question the status quo and devise innovative ways to overcome limitations that stand in the way of financial access for all.
Serve, Don't Judge
Years ago I worked at a large credit union led by a CEO who used to remind us that our job was to “serve, not judge” our members. It's a mantra that has stuck with me to this day and aligns perfectly with the topic of credit unions serving businesses in the marijuana industry. If our movement's objective truly is to serve those who are being marginalized by others, without judging whether their actions align with our own personal beliefs, why are so few of us willing to stand up and have a voice in this important conversation?
Our lack of concerted action is not without potential consequences. Indeed, the hourly dispensary employee who today bravely carries unmarked bags containing thousands of dollars in cash to make routine payments may be the subject of tomorrow's lead story in the Denver Post saying that they were robbed – or even worse – because no financial institution was willing to step in and help them.
This may sound dramatic, but it is a perfectly foreseeable situation given the circumstances in which they are currently operating. And what are we – our credit unions, our regulatory agencies, and our system partners – doing about it?
So far, not very much.
But it's time that lack of action changed. It's time to start a coordinated conversation about these issues. We need to set aside our individual political or philosophical viewpoints and solve this problem together. We need to apply our experience, our creativity – and dare I say our compassion – to find ways around the hurdles that exist to help solve this issue for consumers and cooperatives such as The Fourth Corner Credit Union.
This isn't necessarily to say that as an industry we need to fight for the repeal of federal bans on marijuana or that we need to support an individual's right to use the substance for medical or recreational purposes. But what we should collaborate on is finding an operational solution.
Forging new paths is never easy. And, at its roots, that is exactly what the process of innovating is about. In the Filene i3 program, we teach our participants to question the status quo, cast aside assumptions and work together to build a future that better meets the needs of consumers through credit unions.
Now it is time for us as a movement to do exactly this. Are you on board?
Andrew Downin is innovation director for Filene Research Institute. He can be reached at 608-661-3746 or firstname.lastname@example.org.