What Pot and Porn Have in Common
Or, how banks can cripple a perfectly legal industry
Marijuana has been legal in Colorado for a little over a week, and as the early analyses of the experiment roll in, one surprising fact keeps popping up: even if legal marijuana is a raging success, the fledgling industry could be torpedoed by the simple fact that banks don’t want to work with a quasi-legal industry.
Well, surprising to some, anyway. As someone who’s spent over a decade in the adult industry, I know exactly how complicated financial services can be for someone whose business is only a few steps away from the black market.
If you’ve come of age in the era of XTube, it may seem strange to hear pornography described in such terms. In a time where James Deen can go from AVN Award winner to indie actor, it can be hard for some to understand that the business of porn is a little bit different from, say, the business of running a flower shop. But it most definitely is (and not for the reasons you might think).
In most of America, it’s still illegal to produce pornography; even in California, the home of Porn Valley, making porn was prohibited less than thirty years ago. Sure, you probably won’t get thrown to jail for watching a clip of some hot and heavy fisting action, but thanks to some woefully vague obscenity laws, there’s always the chance that someone will get thrown in jail for filming and distributing it. Even the most fine, upstanding pornographers are fully aware that they’re a stone’s throw away from criminal behavior — especially on the days when they have to go to the bank.
As the pot producers are now discovering, private banks don’t have to take your money; even law abiding pornographers often find that there are many banks that won’t. I’ve seen multiple banks refuse or cancel accounts because they don’t feel comfortable aligning with the porn industry — and when it comes to online payment services, the situation is even more dire. Yes, the adult industry may have pioneered and popularized the software that made PayPal possible, but that doesn’t mean that PayPal will handle money for adult businesses — trafficking in anything pornographic, obscene, or even sex-related can get your PayPal account frozen or completely cancelled (and no, they won’t give you the money they’ve collected on your behalf).
Of course, even with all the headaches and hassles, porn still survives. And chances are good that marijuana will as well. Unlike pornography, the newly minted legal pot industry comes with the express involvement of state governments; state governments who have a vested interest in seeing the fledgling industry succeed. Chances are good that Colorado and Washington will figure out a way for their brand new pot stores to pay their employees without resorting to money laundering, even if the bank industry doesn’t welcome them with open arms any time soon. In spite of these hiccups, legal marijuana will live to see another day — just, uh, don’t expect to pay for your pot cookies with PayPal.
