To make payroll each month, Dori Dempster used to have to carry cash to the bank in $10,000 chunks. And that, she said, was before the credit union where her medical marijuana dispensary banked abruptly closed its account.
Since it opened in Vancouver in 2008, The Medicinal Cannabis Dispensary has had cash flow that many small businesses would envy. Dempster said that they now turn about $3 million in sales a year and that the dispensary is thriving.
But it also has a money problem.
Like many of the hundreds of medical marijuana dispensaries that have sprung up across Canada — or at least the ones that are honest about what they sell — The Medicinal Cannabis Dispensary has been locked out by Canada's banks because marijuana dispensaries are still outlawed, even as the federal government plans legalization.
"I'd rather see the banks working with us. We're trying to do the legitimate thing like every other business out there," said Dempster. "The only difference is that we're selling cannabis; we're not selling yo-yo's"
Since the passage of the "Marihuana for Medical Purposes Regulations" by the Conservatives in 2013, the federal government has been trying hard to quash the flourishing dispensary industry — that according to one analyst's estimate generates more than $500-million a year — and the network of growers that feed it in favor of supplying pot to patients through government licensed producers.
Routine police raids of dispensaries across the country has not abated under Justin Trudeau's Liberals, but in February a federal judge struck down the ban on growing medicinal marijuana at home as unconstitutional. As of August, the ruling will void the "Marihuana for Medical Purposes Regulations," and the government has opted not to appeal, leaving a regulatory hole that likely won't be filled until the Liberals table new pot legislation next spring.
In Canada, as in the United States, banks are subject to federal regulation, and the confusion around dispensaries has made them wary about touching money tied to the quasi-legal side of Canada's pot industry. In fact, they're not even willing to talk about it.
Save Toronto-Dominion Bank, none of Canada's big five banks — TD, Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal and the Canadian Imperial Bank of Commerce — acknowledged questions about their dealings with federally licensed producers or dispensaries.
Unable to accept credit and debit cards or even open a checking account with banks, many dispensaries have turned to credit unions: financial institutions that provide many of the same services banks do, but are member-owned, generally not-for-profit and, in Canada, often creatures of the provinces rather than the federal government.
Don Briere, who operates a small empire of more than 20 dispensaries across Canada, said that because of legal uncertainties banks won't touch his business, despite it being a tax paying enterprise. Briere said he uses credit unions instead, but these too can be unreliable and many dispensary owners are hesitant to even discuss how that handle money for fear of being dropped as clients.
'The only way I can accept credit cards currently is to lie.'
"Without normal banking, it's a scramble," said Briere. "It's a huge challenge."
Dempster said that her dispensary initially turned to a credit union as well: Vancity. For a while The Medicinal Cannabis Dispensary used the Vancouver union much like any other business would use a bank: depositing cash to pay taxes, bills, and make payroll.
But then in 2012, "Vancity simply closed the account during the evening and I couldn't access banking by phone in the morning," Dempster said. "When I called the credit union to ask why I couldn't access they said to come and get the funds in the form of a cheque. Account closed."
Vancity declined to provide any comment for this story.
The Medicinal Cannabis Dispensary also tried its luck with TD and, despite their business, was able to open an account — only to have it shut down several months later. TD would neither confirm nor deny this specific account, nor answer general questions about whether it does business with the marijuana industry.
Aaron Salz, a financial analyst who watches the marijuana market, estimates that Canadian dispensaries are already doing "upwards of $500 million in sales per year," and some financial institutions are becoming less trepedatious.
The Vancouver-based CCEC Credit Union advertises on their website that they work with dispensaries, and general manager Ross Gentleman said they have over a dozen as clients. The Medicinal Cannabis Dispensary is among them, but according to Dempster the only possible way to operate an honest dispensary is to do so in cash.
"The only way I can accept credit cards currently is to lie," she said.
Save paying their utility bills through CCEC, The Medicinal Cannabis Dispensary has worked out a system by which they operate entirely in cash. But it's inconvenient and, Dempster said, some of their employees end up losing a significant percentage of their annual salary in fees to check-cashing companies like Money Mart.
Not all dispensaries have faced these problems. Marc-Boris St-Maurice, the founder of Quebec's Bloc Pot party who has operated the Montreal Compassion Center since 1999, said that his cash-only business does have an account with a major bank — although he declined to say which one.
St-Maurice said he is entirely honest about the nature of his business, but also advised that as a haze of regulatory uncertainty continues to hang over Canadian pot, dealing with banks takes tact.
"Vagueness can be your ally," he said.
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