Conference Day Two Keynotes: Banking and Dealing With MMJ Naysayers

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By John Schroyer

Watch out for potential lawbreakers as customers.

That was just one word of advice offered by Tom Fleming on Thursday morning to a room full of cannabis entrepreneurs at the 2015 Spring Marijuana Business Conference and Expo in Chicago.

Fleming, a former official with the Financial Crimes Enforcement Network (FinCEN) at the U.S. Treasury, said he had been told by one retailer of a customer who came in on a quarterly basis from out of state to purchase large quantities of marijuana. If the retailer continued to sell to that customer, while suspecting that the purchases may be regularly trafficked illegally over state lines, then the retailer’s bank accounts and entire operation would be put at risk.

“That kind of pattern of activity indicates they are simply breaking the law,” Fleming said. “Then (the U.S. Department of) Justice has the option of penalizing the bank for not knowing their customer well enough… The bank could close your account. Justice could close your business.”

It’s obviously not illegal for recreational shops to sell to out of state tourists in Colorado and Washington, Fleming said. But be wary of such patterns, he advised, because it’s not worth risking an entire business for a few customers who may be breaking the law.

Fleming, along with Josh Stanley of Citiva Medical, were the keynote addresses of the second day of the Conference. Stanley is one of a group of brothers who became internationally famous after word broke of how their high-CBD strain of MMJ called Charlotte’s Web was working wonders for children with severe epilepsy.

Both Fleming and Stanley told Conference attendees that for the betterment of the industry as a whole, companies should focus on educating the public as to the upsides of marijuana reforms, instead of taking a more oppositional stance.

Stanley related a story about how his office had once been picketed by conservative Christians holding signs with slogans such as “Jesus hates pot.”

Stanley told his staffers to order pizza for the protesters, and then he went out to speak with them about his work on the medical benefits of cannabis, until eventually one woman asked if he thought it could help with her arthritis.

“We can affect change by being that change,” Stanley told the audience.

There’s also still a long way to go when it comes to research and discovering medical uses for marijuana, Stanley said, and argued that there are tens of millions of potential new patients who could be treated for ailments that range from diabetes to chronic pain to seizure disorders. The next step, he said, is further research, clinical trials, and product standardization.

Marijuana companies are also much more likely to be able to get financial services by being as transparent as possible, and by working with smaller independent banks instead of approaching large chains, Fleming said.

“Smaller banks are much more prone to service their community,” Fleming said. “That’s where we’re looking to penetrate.”

But significant banking policy changes at the federal level probably won’t be coming down the federal pipeline anytime soon, Fleming said. Even if Congress did pass a law codifying changes to banking regulations for marijuana companies, he added, it would probably be four years before such a switch could actually take effect.

In the meantime, Fleming said, what marijuana companies should do is focus on developing more personal relationships with bankers, to allay banks’ concerns about risks surrounding the cannabis industry. The Department of Justice and FinCEN “are making a huge effort” to get banks to work with law-abiding cannabis companies, he said, but they can only do so much. The rest is up to bankers and marijuana businesses.

“Banking relationships are based on trust. A mutual trust,” Fleming said. “It will be up to you to show the banker that you are trustworthy.”

John Schroyer can be reached at