A Florida marijuana bank called, First Green Bank, just opened a branch in Ft. Lauderdale and accepts deposits from medical marijuana dispensaries and other associated cannabis businesses. Federally, marijuana is illegal and so banks have been reluctant to accept funds from cannabis related businesses in fear that assets would be seized by the government.
Many states have seen small banks willing to accept the risk of having the federal government interfere. These banks accept state legal cannabis business deposits in expectations that the marijuana legalization movement will win out. Do you believe these banks are taking a high odds risk or that the cannabis businesses making the deposits are the ones taking the biggest risk?
The “green” in First Green Bank no longer refers only to its founders’ mission to offer discounted loans for electric cars and solar panels.
Now, it’s also about supporting Florida’s nascent medical marijuana industry.
The Orlando-based bank, which opened its first South Florida branch in Fort Lauderdale last year, says it’s the only Florida-based financial institution that is willing to serve the fast-growing medical pot business.
First Green’s corporate officers know the bank is treading where few others dare to go, in Florida or elsewhere. That’s because although marijuana is now legal for medical use in 29 states and for recreational use in eight states, the drug remains illegal under federal law.
First Green’s competitors remain on the sidelines, industry experts say. They are either concerned about the potential that the Trump Administration’s Justice Department might pursue prosecutions and asset seizures, or unwilling to endure the costs of complying with disclosure reports required during the Obama Administration.
Chartered in 2009, First Green Bank was founded with a mission of promoting environmental and social responsibility with low-interest loans on electric cars, solar systems, and LEED-certified construction projects.
Now it serves six of Florida’s first seven state-licensed medical marijuana businesses, including Trulieve, Surterra and Green Solutions, and expects to capture the rest of the market as it comes online. Five businesses were recently granted licenses and five more will be awarded in October, founder and chairman Ken LaRoe said in an interview.
“I suspect we’ll have the entire industry by [the fall],” he said. “Also, we’ll focus on the ancillary industry — physicians, attorneys and fertilizer guys.”
Added Lex Ford, senior vice president: “We’re the only real game in town.”
So far, 15 dispensaries have opened around the state. That will change quickly with new state regulations allowing each licensed business to open up to 25 dispensaries.
Because dispensaries cannot accept checks or credit cards, patients must pay by cash or through an electronic wallet called CANPAY.
First Green contracts with an armored pickup service that collects the cash from the dispensaries and ships it to a Federal Reserve vault.
“It never comes back to the bank except by electronic transfer,” Ford said. “We never touch the cash.” The arrangement prevents dispensary employees from being targeted by robbers and helps verify to authorities that illicit money isn’t being laundered through the operations, Ford and LaRoe said.
LaRoe said the bank has yet to make money on servicing marijuana businesses, but expects to as the industry grows.
For LaRoe, the decision to serve and promote the industry was a personal one. “My wife developed a seizure disorder and she was able to be cured with cannabis,” he said. “It’s a miracle drug.”
First Green accepted its first deposit in July 2016 from Surterra, one of the first growers licensed by the state. Since then, about $35 million of roughly $630 million deposited with the bank has been marijuana-related, LaRoe said.