LOS ANGELES — Slip a fresh $20 bill under the bulletproof teller window of Donnie Anderson’s Medex marijuana dispensary — perhaps for a gram of cannabis or some THC-infused toffees — and the legal tender is transformed into something else: drug money.
Though the transaction is legal in California, under federal law that bill is not much different from the contents of a drug cartel’s safe — cash that most banks won’t touch.
So how is Anderson supposed to pay his employees, suppliers or business taxes? He deposits cash, in small amounts, into an account held by a limited liability company that his bank thinks is a property management firm.
“The bank doesn’t know what we do,” he said.
If this sounds like money laundering, you’re not far off.
Yet consider this: That same $20 exchanged at Canndescent, another cannabis company, takes a direct and transparent route into the financial system.
When the marijuana cultivator sells its product to a dispensary, one armored car drops off the marijuana and another picks up the cash payment — and then heads to a downtown Los Angeles branch of the Federal Reserve Bank.
There the cash is deposited into the account of a local credit union, one that’s eager to do business with Canndescent.
“After all the horror stories I’ve heard, it does seem like a little bit of magic,” said Tom DiGiovanni, Canndescent’s chief financial officer.
Indeed, though the same laws apply to Anderson’s dispensary and Canndescent’s farm, the world of cannabis banking is so full of contradictions that one business can truck money to a federal facility while the other is left to play a high-stakes game of hide-and-seek with its cash.
“It’s the early stages of the Wild West,” said California Treasurer John Chiang, who is leading an effort to