Colorado Hemp Farmers Are Turning to Bitcoin for Their Banking Woes

Article by Daniel Oberhaus, Motherboard

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You could almost say Veronica Carpio was born to sell cannabis. Aside from having a birthday on 4/20, the 38-year old Colorado native was also the first female dispensary owner in the state, ran a covert coffee shop appropriately called The Front, and now oversees the largest hemp seed exchange in the state while producing her own brand of hemp coffee.

When I spoke with Carpio during a smoke break at the CryptoCannabis Conference in Denver last month, her passion for pot was palpable, but it was this very enthusiasm for ganja which had landed her in hot water in the past. In 2011, Carpio was arrestedfor brokering a $30,000 deal which would’ve sent ten pounds of pot from her dispensary out of state. The three-month undercover sting operation resulted in one felony charge and a year on probation, but for Carpio it was just the beginning of her cannabis woes.

After she was raided and arrested, Carpio pivoted away from marijuana toward hemp, a type of cannabis with next to no THC content. In Colorado, hemp is legally defined as any cannabis plant with a THC concentration of less than .3 percent. Although hemp is not as strictly regulated by the Colorado government because the end product lacks a psychoactive component, this relaxed attitude doesn’t translate to federally regulated financial institutions operating in the state, a lesson that Carpio learned the hard way.

It’s no secret that banks, credit card companies, and online payment apps like PayPal have no desire to work with businesses that traffic in legally nebulous goods (even though the Justice Department has gone on record to say that it’s chill). This leaves most cannabusinesses with two options: don’t have a bank account or lie about the nature of your business to the bank. Many dispensaries and cannabis cultivators in Colorado have opted for the latter option, including Carpio. These cannabis entrepreneurs are inevitably caught (it’s really hard to not raise a red flag when you’re depositing tens of thousands of dollars in cash into your account every week) and punished.

As I was told by Tim Cullen, the proprietor of the Colorado Harvest grow op, when Wells Fargo discovered his account was linked to marijuana cultivation, not only did they shut down Cullen’s business account, but they also shut down his family members accounts, including his four-year old son’s college savings account. While this might’ve been expected for a marijuana grow, hemp farming doesn’t have quite the same stigma, which is why Carpio was surprised when PayPal informed her that they were shutting down her business account and freezing her funds for six months.

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