One Florida bank is willing to risk it all on cannabis when others won't

First Green Bank, a community bank based in Orlando, is the first in Florida to work with licensed medical marijuana companies. [Photos courtesy of First Green Bank]
First Green Bank, a community bank based in Orlando, is the first in Florida to work with licensed medical marijuana companies. [Photos courtesy of First Green Bank]
Published Aug. 31, 2017

Opening a medical marijuana dispensary in Florida naturally comes with a lot of red tape.

Marijuana is still considered an illegal substance at the federal level, despite the 29 states that have legalized it for recreational or medicinal use in recent years. That makes it nearly impossible for banks to fund marijuana distributing companies, which in turn makes it hard for those companies to sign a lease for a store or warehouse or even get insurance.

But one Orlando area community bank is willing to take on the risk.

First Green Bank, a community bank that began in 2009, is working with six out of the seven currently licensed medical marijuana dispensing companies in Florida.

"It all comes down to compliance and transparency, since we're subject to enhanced money laundering rules," said James Whitcomb, the chief financial officer of Surterra Holdings Inc., an Atlanta-based medical marijuana company which has grow operations and dispensaries in Florida, including in Tampa. Surterra is a client of First Green Bank. "In order for banks to be compliant with us as customers, they have perform a lot more due diligence. It basically means they have to track every single transaction we make to ensure that no dollar goes to any gang or criminal enterprise," Whitcomb said.

Because federal law makes it illegal to possess or distribute marijuana — no matter the laws passed in an individual state — it's considered money laundering, according to the American Bankers Association. It would take an act of Congress to change that. Because of this, most banks in Florida have steered clear of working with the state's seven licensed growers and distributors of cannabis.

Lex Ford, a senior vice president at First Green Bank, said he couldn't think of a competitor in Florida who was willing to try.

"It was interesting at first, when we're telling these high net worth CEOs how little we could let them dictate the process. We expected frustration," Ford said about working with marijuana companies. "But everyone in it understands this is how it has to go."

Previous Coverage: It may be legal now, but opening a medical marijuana store in Florida is harder than you think

First Green Bank is a fairly small operation with just six branches, mostly in Central Florida and one in South Florida. It manages about $622 million in assets. The bank doesn't have a branch in Tampa Bay yet. Ken E. LaRoe, a seasoned banker, founded First Green Bank with a specific purpose in mind. The bank firm actively promotes environmental and social responsibility and is known for offering discounts and low-interest loans on "green" initiatives, like electric cars, LEED-certified construction and solar systems. Now it's added cannabis to that list.

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"Ken's wife used marijuana as treatment for seizures and it changed her life," said Ford, who describes himself as LaRoe's "wingman." "That's what started us down this path in 2010, about a year after the bank was founded. By 2012 to 2013, we were coming up with a plan and got approvals by 2014."

First Green now employs a team of people who work exclusively with medical marijuana clients. Most of what they do is manage compliance. But Ford said it's been a learning process. For example, it's not uncommon for cannabis companies to deal mainly in cash.

"Cash is still king in this business. That requires us to hire armored cars to pick it up from the dispensaries," Ford said. The bank then sends the cash to the Federal Reserve, which deposits it in a company's account.

"We presented our plan to the FCC, FDIC and every regulatory group out there possible," Ford said. "It's possible to do this. We just have to do it right. So we're being as transparent as possible."

Ford said he has every cannabis companies' CEO on speed dial. Meanwhile he and his fellow banking executives are paying attention to what happens in Tallahassee, as rules change and more companies are about to hit the market in Florida each year. The number of licensed medical marijuana companies in the state will grow to 10 this year, per legislation passed during a special session in Tallahassee.

Previous Coverage: Meet Florida's legal drug cartels

"First Green takes a lot of the regulatory burden off of us," Whitcomb said. "We really couldn't be happier with our arrangement. We really feel like they've got room to scale up, too" as the industry expands.

"A lot of challenges remain. As additional banks get drawn into this space, more banks will invest in compliance and make it easier on their clients. There has been a real focus on Florida, and we're seeing some changes at the highest level for increased competition in banking in Florida."

Contact Justine Griffin at or (727) 893-8467. Follow @SunBizGriffin.