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David Alport’s retail cannabis shop is neat as a pin. The glass counters at North Portland’s Bridge City Collective gleam, and the products are carefully positioned. The only unusual note is a decidedly not-so-sleek ATM given a prominent place of honor near the entrance.

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“It gets used a lot,” Alport said, “being an all-cash business.”

David Alport is the owner of Bridge City Collective in North Portland. Jeff Mapes / OPB

Because marijuana operates in a gray area – legal in Oregon and many other states but illegal under federal law – cannabis businesses have long struggled to get banking services. That means they can’t simply accept the credit cards used by consumers for everything from the humblest food cart to a gigantic online retailer. Opening a checking account or getting a business loan can also be a challenge.

As the legal cannabis business in the United States grows from $10 billion in sales now to an estimated $30 billion by 2025, pressure is building to bring the industry into the financial mainstream.

The U.S. House last month passed legislation that would make it clear to banks and other financial institutions that they can serve the marijuana industry without running afoul of federal law. The measure is now in the Senate, where it faces uncertain prospects.

At the same time, a jerry-built financial infrastructure is springing up around the cannabis industry.

In Oregon, a pathbreaking credit union is attracting hundreds of millions of dollars a year in deposits by serving more than 500 cannabis businesses. A welter of start-ups hawk products designed to allow customers back-door ways to use their credit cards to buy marijuana. And a burgeoning network of private financiers offer loans to cannabis businesses.

“It’s starting to normalize a little,” said Beau Whitney, a Portland-based economist and industry consultant, “because people are seeing opportunities in this space to fill the void.”

At the same time, almost everybody in the business seems to have stories about scam artists, predatory lenders and promised financial solutions that don’t pan out. In short, the business side of the industry can be as surreal as some of its most fancily named hallucinogens. Here are three snapshots illustrating the ups and downs of the financial world of legal marijuana.

The Gift Card That Went To Pot

The trouble apparently started last April 20 – a.k.a. 4/20, the day many people celebrate cannabis culture by lighting up at 4:20 p.m. Sales were surging, and Linx, a California-based startup providing “gift cards” for cannabis retailer, began running into trouble paying its merchants.

Janice Grossman, who owns Oregon’s Green Rush shop in Eugene, was one of them.

“It’s like living in the wild, wild west,” fumed Grossman, who said Linx now owes her $60,000.

Grossman is not alone. Two other retailers – including one who had given an endorsement to Linx for its website – told OPB that Linx also owes them money.

The company acknowledges that almost all of its 300 customers in 20 states are owed money. Linx shut down operations in July. But CEO Patrick Hammond said he’s working to start back up and vows that the retailers will all get their money back.

“My goal is by the end of October,” Hammond said. “But that’s a goal.”

Grossman said she’ll believe it when she sees the money.

“They’ve been telling me that since June,” said Grossman, adding that she’s received shifting explanations of how Linx would make good on her account. “Everything they say I take with a grain of salt,” she said.

Linx is one of several companies that offered cannabis retailers a work-around to the refusal of the big credit card networks to serve marijuana businesses that are technically illegal under federal law. They include using cryptocurrency or phone apps tied into checking accounts.

Linx offered something akin to a Starbucks card. The Linx cards could be used at a cannabis shop. While it worked, retailers said it boosted sales.

But, according to Linx CEO Hammond, the surge in sales on 4/20 led to problems involved in ensuring that all the sales involved legal cannabis. One of the banks involved in processing payments decided it wanted to “de-risk” its business, he said. Hammond said Linx is now beefing up its systems to make sure it can demonstrate its transactions involve legal marijuana.

Linx is not the only card processing company that’s given cannabis retailers heartburn.

“You can’t go anywhere without running into [card] payments people,” said Noah Carey, a Wall Street veteran who now runs a startup involving cannabis banking. He said the business offers high fees and the opportunity to make money on the “float” – that period of time between when they collect money from credit card purchasers and when they pay merchants.

“I just know that the people I’ve met on that side [of the industry] for the most part are kind of sketchy,” said Carey, CEO and founder of Seattle-based Shield Compliance.

Mike Chappell, a Colorado resident who owns a Northeast Portland cannabis retailer called Silver Stem, said he receives emails “on a daily basis from people saying they can do credit card purchasing. But this has been an ongoing scenario for the industry as long as I can remember."

He said he’s been through the cycle with more than one processor. “They will allow you to take credit cards and then after a couple of months it’ll just be shut down basically," he said.

Chappell, who endorsed Linx on their website, said that while the company owes him money, he appreciated that the firm has at least stuck around. “It doesn’t seem like they’ve tried to cut and run,” he said.

The Cannabis Credit Union

MAPS Credit Union appears to be thriving. Assets are up 60% in the last five years. They’re erecting a second building next to their four-story headquarters in downtown Salem. They run sideline businesses ranging from health insurance to disaster recovering services.

MAPS Credit Union in Salem, Oregon, serves more than cannabis-related businesses. Jeff Mapes / OPB

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But here’s one thriving sideline you won’t find on their website: They’re the go-to bank for Oregon’s cannabis-related businesses.

With more than 500 marijuana retailers, growers and processors, MAPS – once known as the Marion & Polk Schools Credit Union – has become one of the pioneers in serving an industry that most bankers avoid. Nationwide, experts estimate that only about 50 to 60 financial institutions openly work with cannabis businesses.

Rachel Pross, the chief risk officer for MAPS, said the credit union made what she calls the “gutsy call” to serve cannabis businesses after Oregon voters legalized the drug in 2014.

Many bankers worry about the risk to their reputation if they get tied to cannabis. And an even bigger fear is that federal regulators could charge financial institutions illegal drug trafficking, yank their deposit insurance or even shut them down. But Pross said it’s better for everyone to get these businesses into a “transparent, compliant” banking relationship.

“Nobody benefits from an underground economy,” she said, “except criminals and cartels and all of the people we don’t want operating in our state.”

Alan Hanson, a Portland lawyer who was the MAPS general counsel at the time, said the new line of business was also good for the credit union.

“We saw a need, we saw an opportunity, and we took advantage,” he said.

Hanson and other credit union officials helped figure out a way to serve the cannabis industry while following guidelines laid down by the Obama administration. They demand detailed financial reports from their cannabis clients. They also conduct background checks on everyone involved in the business and keep close watch on whether they are following state regulations.

“It’s really intense,” Pross said. Among other scrutiny, the credit union files thousands of reports on its clients’ activities with the U.S. Treasury Department’s Financial Crimes Enforcement Network.

As a result, if any of the credit union’s clients are suspected of illegal drug trafficking, the federal authorities have a lot of the evidence already served up on a silver platter.

This work doesn’t come cheap. MAPS has a full-time staff of 13 handling cannabis businesses. And the credit union beefed up its security plans for handling the big cash deposits generated by cannabis retailers.

MAPS charges fees for cannabis accounts that typically run several hundred dollars a month. That’s a lot more than the credit union charges other kinds of businesses.

Cannabis retailers sometimes grumble about the high costs. But Chappell, who owns the Northeast Portland shop, also has business operations in Colorado and said some banks there charge much higher fees.

“I think MAPS is actually doing a relatively good job of keeping the monthly costs low, at least low enough,” he said.

MAPS has built its cannabis business solely by word of mouth, to the point that Pross now estimates cannabis accounts make up about 7% of the credit union’s overall deposits. But it’s getting more competitive.

On their websites, Wauna Credit Union of Clatskanie and Salal Credit Union of Seattle both offer a suite of financial services to cannabis businesses in Oregon and Washington. And experts predict an influx of financial institutions if Congress passes the SAFE Banking Act.

That could help drive down costs, but Pross and others say that the federal financial guidelines will remain even if the bill becomes law. She said bankers would still have to spend extra money carefully overseeing cannabis-related accounts.

At the same time, Pross said MAPS must remain ready to respond if federal officials do an about-face and decide they don’t want to tolerate the state-sanctioned cannabis business. That’s one reason the credit union doesn’t offer business loans to the industry.

“We have a vey well-documented and tested exit strategy,” Pross said, “so if there is some dramatic change at the federal level, we can act quickly.”

Cannabis Cash Is Expensive

David Alport, the North Portland retailer, didn’t even have an ATM in his store when it opened in 2014 as a medical marijuana dispensary. He paid suppliers and workers in a mixture of cash and checks, some drawn on his personal bank account.

“If we had to pay our taxes,” he said, “we would drive down to Salem with stacks full of bills.”

Brook Binder, owner of High Quality in Corvallis, recalled the first advice he received on how to safeguard his cash: “Put your money in empty pipes, and put it under your compost or under where your dog poops.”

A lot of the business still gets done in cash. The State Department of Revenue says most cannabis tax payments are now made by check or money order, but about 40% arrive in cash. The agency built a special facility to securely handle that money.

Alport now banks through MAPS, and he uses an armored car service to make his cash deposits. In his shop, credit card shoppers can either use the ATM or a smartphone app that customers can load with money from their checking account.

A bigger challenge is getting access to a different kind of cash – capital to grow the business. Even financial institutions that work with the industry tend to be wary about loans.

Hanson, the Portland cannabis lawyer who once worked for MAPS, said banks are always worried about the future stability of businesses based on a drug still prohibited at the federal level.

“It’s pretty easy for a bank to say, ‘We’re closing your account, here’s the check,’” Hanson said. “It’s a lot more difficult to say, ‘Yeah, that million-dollar loan we just gave you? We need that back tomorrow.’”

In place of normal business banking, cannabis entrepreneurs have turned to a wide variety of other sources. Sometimes, they take help from friends or relatives. More often, they turn to hedge funds and wealthy investors.

Interest rates are typically much higher than the standard commercial loans offered by banks. And it’s easy to get taken for a ride.

“There’s predatory lending, so you have to be careful of that,” Alport said. “These guys are out there trying to lend to the cannabis industry, and when you add up all their fees and everything, it can be 40, 50% interest.”

Alport and others say the high cost of money is part of what’s forcing the rapid consolidation of the industry. In Oregon, for example, a small number of chains with access to capital are increasingly dominating the retail industry.

But the cannabis industry still has a Gold Rush feel to it. Eleven states have fully legalized marijuana sales and all but a handful permit some form of medical marijuana. Every time another state opens up the cannabis pipeline, entrepreneurs rush in.

Alport is among them. After Illinois legalized cannabis earlier this year, Alport and his partners applied to open several retail operations in the Chicago area. Unlike in Oregon, Illinois will limit the number of retailers, meaning that winning applicants won’t have nearly as much competition.

“I’m trying,” he said, “to take what I’ve learned here and the skills I’ve developed into new markets.”