Banks, insurers shunning pot shops. Legality, risks with cash among main concerns

San Diego Union Tribune reports:

Fresh off a complex and expensive approval process, San Diego’s first wave of legal medical marijuana dispensaries is facing the additional challenge of being shunned by banks and insurance companies.

Because marijuana is still considered as illegal as cocaine and heroin under federal law, banks won’t approve loans for dispensaries, give them bank accounts or process credit card sales for them.

That forces dispensaries to operate almost exclusively with cash, increasing the risk of armed robbery, employee theft and many other problems that tend to make insurance companies queasy.

The businesses themselves and the industry as a whole also have almost no track record of success or sound management, making it that much harder to convince banks and insurance companies to change their minds despite a nationwide trend toward legalization.

Risks.