BANK OF DENVER TO CLOSE ALL MEDICAL MARIJUANA ACCOUNTS: CHERRY TOP
FARMS BUST A FACTOR?

One of the biggest issues for medical marijuana entrepreneurs is the
shortage of banks willing to take their money. Most used Colorado
Springs State Bank until September 30, when its MMJ accounts were
dropped. And now, The Bank of Denver, where other businesses had found
refuge, is doing likewise -- and a dispensary owner says the decision
was prompted by the recent raid at Cherry Top Farms.

The owner, who asks that his name not be used, says The Bank of Denver
was the sixth that's "kicked me out" -- the previous one being
Colorado Springs State Bank. He understands that such facilities are
anxious about working with MMJ operations, since marijuana remains
against federal law, and banks are federally regulated. Nevertheless,
"I've never made up any stories," he stresses. "I've told them exactly
what I do, because my goal is to be 100 percent forthright about this
legal business."

So why did The Bank of Denver decide it didn't want his moolah
anymore? From what he's heard, the move was connected to "the bust
that happened at Cherry Top Farms."

As we've reported, the Cherry Top Farms dispensary was raided last
week by Drug Enforcement Agency officers, among other law-enforcers,
with more than 2,500 plants and many other products taken. Why? The
feds had been conducting surveillance operations on Nathan, Ha and Hai
Do over an unlicensed, permit-free grow facility the feds had already
taken down once before. Just as search warrants were about to be
executed, a truck filled with plants left the grow, and agents
followed it to Cherry Top Farms. And while CTP wasn't the target of
the investigation, agents were required to seize all of the marijuana
there in addition to what was in the truck.

"Cherry Top Farms was one of The Bank of Denver's biggest depositors,"
the anonymous owner says. "And their feeling was, if this is what can
happen to one of their biggest depositors... well, they got very scared."

Which explains the phone call the owner received yesterday, informing
him that The Bank of Denver had decided to close all its medical
marijuana-related accounts.

Rumors that the accounts would be shut down as of October 31 don't
jibe with what the owner was told during that conversation: He was
informed he's got until January 3, 2012. But that's still a short
amount of time to get his financial house in order somewhere else.

What to do? Some dispensaries are going cash only, but he doesn't see
this approach as a viable option. "If we want to be 100 percent
transparent, how can you be transparent in a completely cash business?
I'm a little leery of that. I don't want to be in a situation where my
credibility can be second-guessed."

With that in mind, he'll likely make an arrangement with "an online
bank" as a stopgap. In the meantime, though, he's been in contact with
Senator Pat Steadman, who'd tried to get language about investment
funds into HB 1043, the so-called medical marijuana cleanup bill.
(This passage was removed even before U.S. Attorney John Walsh raised
objections to it.) "He has agreed to sponsor a bill to get a bank
chartered specifically for the medical marijuana industry," he says.

In the short term, though, he describes The Bank of Denver's decision
as, quite simply, "a disaster."