Proponents of the legal marijuana business were encouraged last week when federal officials announced they would allow banks to do business with state-sanctioned pot outlets in Washington and Colorado.
In Washington state, the recreational marijuana business is still on the launch pad, as the Washington State Liquor Control Board wrestles with the complexities of setting up a system of production, manufacturing and sale. In Colorado, state-sanctioned stores are already in business--but some major banks in the state are not interested.
In this report from the Denver Post, officials from the state's two largest banks say they will not get involved in the new business opportunity.
Bank officials have told Colorado commercial real estate owners that they will not refinance their loans if they have marijuana entrepreneurs as tenants.
According to the Denver Post report, the bankers' fears are both financial and legal.
Federal officials have made it clear that they will let the Colorado and Washington stores operate--subject to a long list of conditions. If the feds decide that the stores are not measuring up, they could swoop in and enforce federal drug laws. Among other things, those laws would entitle federal officials to seize real estate used in an illegal drug business, in some circumstances. Banks don't want to loan money secured by real estate that might face this kind of risk.