I-Team: Banks Lag Behind Loosening Marijuana Laws - 8 News NOW

I-Team: Banks Lag Behind Loosening Marijuana Laws

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LAS VEGAS -- Nevada's growing marijuana business could be choked off when banks refuse to do business with them. Because federal law hasn't caught up with Nevada's loosening restrictions on marijuana, banks are keeping their distance from pot.

It was only a few years ago when marijuana dispensary and cultivation owners had a counter-culture vibe to them. Now, they talk more about financing, capital and tax rates. But the lack of respect the marijuana industry gets from the banking world threatens to keep the businesses in the shadows.

Marijuana comes in many shapes and sizes and it can be smoked or eaten.

"We looked at the profitability, looked at the money and said wow," said Bob Eschino, owner of Incredibles, a bakery that makes marijuana edibles.

Weed chocolates allow people to get a consistent amount of THC which is what gives people a feeling of being "high" or "stoned." Eschino and his pastry chef couldn't resist getting into Colorado's new weed market.

"Neither one of us smoked at the time. I've never tried one of my own products," he said.

POLL: Should Nevada legalize marijuana?

Eschino hired one employee three years ago. He now has 30 workers and says he could use twice as many.

"If I was a tire shop I would take our books in and show the bank our books and they would go, yeah, you can have any loan you want. You have cash flow, you're profitable, you have zero debt, what do you need? Unfortunately in this business, you can't do that. So you have to sell equity. Everything is self-funded."

Federal drug guidelines still rank marijuana at the most dangerous level. The feds consider pot as dangerous as LSD and heroin and even more dangerous than cocaine. Although Hollywood is filled with images showing Wall Street's "colorful history" with cocaine.

Financiers won't do business with pot shops, at least officially. We witnessed multiple marijuana dispensaries take credit cards, but no marijuana business wants to talk about their secret banking relationships. The Denver City Council just passed a resolution.

"Urging the feds to back off and treat these business like a normal business," said Charlie Brown, Denver councilman.

Las Vegas Metropolitan Police Department is not looking forward to a cluster of cash only businesses setting up shop within months.

"Not only a target for crime, but the potential for money laundering or some kind of criminal activity associated with a cash only business," said Chuck Callaway, Metro Police.

"This is an accountability issue. Cash only industries are not known for paying all their taxes," said Mike Elliott, Medical Marijuana Industry Group.

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Elliott points out that weed companies are not eligible for normal business tax deductions. Of course, the IRS is more than willing to charge them federal income tax. It's still early, but marijuana businesses are projected to pay $100 million in Colorado state taxes this year, more than half what cigarette sales contribute.

"The drug war, and the way this has been handled has been completely disastrous. The question is, is our regulated solution, it is really the true solution? We believe it is," Elliott said.

The marijuana industry is slowly getting the respect of lawmakers in Colorado and Nevada. But just as it took years for the weed business to step out of the shadows, it could take just as long for them to get the respect of Capitol Hill and Wall Street.

The federal justice department recently announced they won't prosecute banks financing marijuana businesses, for now.

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