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Medical marijuana dispensaries sometimes lie to banks -- but should they?

As Colorado banks have dropped medical marijuana-related accounts in order to comply with federal regulations, MMJ business owners are looking for advice on how to manage their now often cash-only enterprises. And they're not the only ones asking, as Robert Frichtel recently discovered.

Bloomberg News recently contacted Frichtel, managing partner of the Colorado-based Medical Marijuana Business Exchange, a for-profit company providing consulting services for MMJ outfits in Colorado and other states where medical marijuana is legal, who wrote an op-ed on behalf of his clients, advocating for legal access to banking for the MMJ industry.

Frichtel says his phone has been "off the hook" since the piece ran in Bloomberg last week (it was reprinted in the Denver Post Sunday), adding that it seems like he's "getting the conversation started." Of his estimated fifty clients in Colorado, a majority have lost their banking relationships. "This is something that a lot of people who look at the medical marijuana industry don't even realize has happened," Frichtel notes.

But those in the MMJ industry certainly recognize the problems that running a cash-only business presents. "The major, major challenge comes in with the federal payroll system and the way you have to submit taxes," Frichtel says. "By the elimination of people having access to banks, it's at odds with submitting payroll taxes." Submitting payroll taxes under an electronic system, without access to a bank account, is "an absolute nightmare," he adds.

There are other challenges, too. "We have started to work closely with tax lawyers to have the business owners best manage their businesses in an all-cash environment," Frichtel explains. "It's easier to lose track of cash, so it means, really, an additional layer: an accounting cash-management layer inside of the business."

The federal crackdown on bank accounts for MMJ businesses has been remarkably successful across the nation - in part, Frichtel says, because of how owners have branded their MMJ companies. "Marketing 101 says to name your business to tell people what you do, so when you go into a bank, you're immediately identified by what you do," he explains. And while some MMJ companies are now using less specific names, that's not a long-term solution. "I advise people to be honest all the time," Frichtel concludes. "I don't tell people to go in and lie to a bank. But if it can be slightly more generic, there are people giving that advice."

More from our Marijuana archive: "Medical marijuana banking bill dies in Senate committee."


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37 comments
ColoradoDispensaryMMJPatient
ColoradoDispensaryMMJPatient

I don't think it's a matter of if banks will become MMJ friendly to Colorado dispensaries, but rather just a matter of time. This crime against dispensaries will be broken down like every other wall or obstacle the proponents of reefer madness and the prohibition, medical and otherwise. Rest assured, Colorado dispensaries will make it over these humps, and a bank will emerge that stands for the people in this retrospect.

Dirk
Dirk

Wrong.  7-11 is not a grocery store since it does not carry all the products that a typical grocery store does.  Try getting all the ingredients for a turkey dinner at 7-11.  Bad analogy.

Anyone who sells cannabis is a drug dealer since cannabis contains THC.  Anyone selling coffee is a drug dealer since coffee contains caffeine, a drug.  Sellers of beer are drug dealers since beer contains alcohol, a drug.  Walgreens is one of the biggest drug dealers around.  Guess what they sell?

You really should start thinking for yourself instead of showing us how brainwashed you are.  Man, has the government done a great job on you!

Deb
Deb

 So pharmacies are not legal drug dealers?  They sell drugs don't they?

Deb
Deb

 Why are you repeating yourself?  I heard you the first time.

vannyxin
vannyxin

http://www.true-religions.netTrue religion outlet Owns True religion outlet, which have provided the company with a platform to showcase the entire breadth of the product offering. The company also plans to roll out branded retail stores in Europe, Asia and Canada in 2012.True Religion Outlet is and always will be Timeless, Hippie, Bohemian, Chic.Now True Religion Outlet Online Store in canada are more and more popular.

Indolent_lazy_sack_o_crap
Indolent_lazy_sack_o_crap

Banks lie to us about how much they make off of our investments so that they can skim off the top.  Why should we feel guilty for lying to them?

NOTrobertchase
NOTrobertchase

SORRY, Kilroy, shake that box O' Rocks one more time for your ouija board perspective on real world experience! Donkey_Hotay is NOT Laura Kriho, it's PAT ROBERTSON. AND, Donkey_Hotay, YES, ENTRAPMENT is the word for Northern Colorado Drug Task Force's Antics with mmj physicians.

Deb
Deb

 So selling drugs, when it's legal to do so isn't drug dealing?  I guess then that those who sell cars are not car dealers?  What an idiot!  What a poor brainwashed fool.....

Ricky
Ricky

 Lance, he is simply pointing out that not all drug dealers are breaking the law after you stated that all drug dealing is illegal.  Try reading the thread again.

Jane
Jane

 Ha, Lance can't even read!  What dumbass.

Dirk
Dirk

 You stated: "...all drug dealers are illegal.".

I stated "All drug dealers are NOT illegal!" after giving examples of drug dealing that it not illegal.

Are you that really that stupid? 

WhiteRabbit77
WhiteRabbit77

 Problem is marijuana should be legal. End the prohibition now!

LauraK
LauraK

LOL a bank operating in a free market wouldn't have to report you to the Federal Government for falling out of line with the Tax Collectors and the Drug Warriors.These are socialized banks, who get bailed out by the White House. This isn't free market capitalism, you are condemning something you have never even experienced! 

Ron Paul 2012 

Donkey Hotay
Donkey Hotay

Whoooops!

Looks like "Medical" Marijuana Doctors also lie !

http://www.denverpost.com/news...

2 Colorado doctors face pot recommendation charges

Authorities say that 73-year-old Dr. Dallas Williams of Milliken and 63-year-old Dr. Joseph Montante of Longmont face criminal charges after allegedly writing medical marijuana recommendations for undercover officers who didn't have medical conditions needed under Colorado law to legally use pot.

Dirk
Dirk

 Wrong!  Alcohol is a drug, yet selling of alcohol is legal.  Caffeine is a drug, yet Starbucks makes lots of money selling coffee legally.  The largest drug dealers are the pharmacies, yet they operate perfectly legally.

All drug dealers are NOT illegal!  How about you start thinking for yourself you brainwashed idiot !?!

Tristate80013
Tristate80013

THIS DONKEY IS A REAL PIECE OF WORK. GET A JOB DONKEY AND STOP WORRYING ABOUT THE MMJ BUSINESS AND TRYING TO BRING A BLESSING TO YOUR CRIMINAL ENTERPRISE. CAREGIVER SURE I WONDER HOW MUCH INCOME YOU REPORT EACH YEAR WHILE YOU STUFF YOUR POCKETS.

Donkey Hotay
Donkey Hotay

Lying to Banks = Criminal Bank Fraud !!

... just another criminal count to add to the indictments for operating a Continuing Criminal Enterprise and Money Laundering.

Nick
Nick

 Deb, you are wasting your time.  In his world, drug dealers are those who sell illegal drugs.  He is unable to comprehend that there are lots of people and business selling drugs legally.

valstar
valstar

 Actually Pat Robertson supports the legalize colorado measure. Laura K  AkA Donkey does not.

Johnny
Johnny

 Yeah, and those who sell car parts are not parts dealers either. lol

Jak
Jak

 yeah, i see he skipped right over your point about pharmacies being drug dealers.  looks like the boy's in denial.

Donkey Hotay
Donkey Hotay

All you need is 50%+1 of the vote?So what's stopping you?

Kilroy
Kilroy

 Donkey Hotay =  Laura Khiro of Cannabis Therapy Institute.

Her good friend Robert Chase spilled the beans on this one...

LauraK
LauraK

LOL a bank operating in a free market wouldn't have to report you to the Federal Government for falling out of line with the Tax Collectors and the Drug Warriors.

These are socialized banks, who get bailed out by the White House. This isn't free market capitalism, you are condemning something you have never even experienced! 

Ron Paul 2012 

Matt in Boulder
Matt in Boulder

"Lies and Profit" = Free Market Capitalism !

Why do you hate America?Short term memory loss = Prohibitionist Fail !!  Donkey_Hotay = Ted Haggard ??

Donkey Hotay
Donkey Hotay

Too bad Marijuana Dispensaries are not one of them, eh?

Donkey Hotay
Donkey Hotay

Clue: There is no Legalization measure currently on the ballot in Colorado.

Matt in Boulder
Matt in Boulder

 Sorry Kilroy (loved your Styx album BTW) - Donkey_Hotay is definitely Ted Haggard !!

Donkey Hotay
Donkey Hotay

You really are dumber than a box of rocks, aren't you boy?

Donkey_Puncher
Donkey_Puncher

No, her name is Laura.  She's an internet troll with no friends.  Pity her.  I do.

Donkey Hotay
Donkey Hotay

"I loved America, may she rest in peace.  I hate Amerika because of ..."  Greedy Free Market Capitalist Pigs!

the bushman
the bushman

 oh yeah? well what is dumber than a box of rocks? the smelly hippie carrying it.

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