Bank Shuts Off Cannabis Company, 'Still Illegal'

DENVER (CBS4) - Federal laws are putting a damper on Colorado's budding marijuana business, as one Denver company connected to the retail pot industry learned when it was suddenly cut off from its bank.

Extracting Innovations CEO Brandon Shepherd invented a machine that infuses marijuana into butter for baking. After explaining his device, Shepherd said, "We actually do help people that really do need it."

But when he went to deposit a check at his bank, KeyBank, last week, the teller told Shepherd that his account had been closed.

"That's when we had the conversation: oh I cannot deposit this check, I can't even give you your money," Shepherd said of the teller.

According to the letter he received, Shepherd's business account was closed under the "deposit account agreement," and "funds availability policy."

KeyBank's executive office refused to comment on what that meant, stating they simply had the right to do so. A KeyBank spokesperson said the company couldn't comment due to laws on customer privacy.

"While the Department of Justice and the Treasury in February of last year provided some guidance in easing this situation for banks, serving the marijuana industry remains illegal at the federal level," said Amanda Averch of the Colorado Bankers Association.

Averch also said a bank that does business with a cannabis-related company faces stiff penalty, "Up to bankers losing their careers, and the bank being shut down." Any change, she said, will have to come from Congress.

Gov. John Hickenlooper addressed this issue last week during his State of the State speech, saying, "We will continue to push the federal government to allow banking for this industry."

Shepherd's business is on hold for now, and his revenue on standstill.

"I have bills to pay, but I have no means of paying them because I can't deposit the checks that I have," he said.

Shepherd is now looking for a new bank for his business, and says KeyBank is mailing him a check to return the money he had in that account before it closed.