U.S. Clears Banks to Serve Marijuana Businesses without Punishment

Sunday, February 16, 2014
ATM at marijuana dispensary in Seattle (photo: Ted S. Warren, AP)

Banks have received guidance from the Barack Obama administration on how they may serve marijuana-related businesses without being prosecuted. But bankers are still wary they’ll be burned by federal authorities for catering to businesses legal in their states.

 

The guidance was provided separately by the Justice and Treasury departments. It still requires financial institutions to file “suspicious activity” reports on the businesses, but they’ll be shorter than previous versions.

 

Without access to the banking system, legal marijuana businesses are still forced to complete all their transactions in cash and have nowhere to deposit their receipts, creating a security issue.

 

“You don’t want just huge amounts of cash in these places,” Attorney General Eric Holder said recently. “They want to be able to use the banking system. And so we will be issuing some regulations…” The new guidance includes not placing priority on prosecuting banks that have customers in marijuana-related businesses if they are operating according to their state laws. It does not rule out the possibility of prosecution for the banks, however.

 

“While we appreciate the efforts by the Department of Justice and FinCEN, guidance or regulation doesn’t alter the underlying challenge for banks,” Frank Keating, president of the American Bankers Association, said in a statement. “As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.” FinCEN is the Financial Crimes Enforcement Network, which issued the Treasury guidelines.

 

Marijuana industry advocates weren’t completely satisfied either. “It’s a great step in the right direction, but ultimately it would not solve all the problems here,” said Michael Elliott, executive director of the Medical Marijuana Industry Group in Colorado, told The New York Times. “We need to go beyond saying that this is a low law enforcement priority. There are still violations of federal law going on here. So, federal laws need to be changed to ensure that what is legal in states like Colorado is legal at the federal level, as well.”

 

Twenty states and the District of Columbia now allow the use of marijuana for medical purposes. Colorado and Washington recently legalized the recreational use of pot as well.

-Steve Straehley

 

To Learn More:

U.S. Issues Marijuana Guidelines for Banks (by Serge F. Kovaleski, New York Times)

Banks Still Won't Touch Medical Marijuana Dispensaries (by Ken Broder, AllGov)

Comments

Boss Illuminati 2 years ago
the greatest plant in the universe is almost free, LET FREEDOM RING!!!13 marijuana is California’s #1 crop, yet it’s illegal in the backwards USA, half my family and friends have grown for generations for a rapidly growing estimated 15 billion dollar cali crop.. from 0 states to half the country, from low 20% approval to almost 70%, cali runs this planet by 2 decades, time to tie marijuana to the 2014, and 2016 elections 20 years behind us southern states, sad and scary....nobody denies freedoms like the south, nobody...even if marijuana reforms did pass the republiCANTS in charge would deny you all your freedoms, centuries of practice...no matter though, we never planned on getting your backwards brethren from day one, half the country already but not one southern state, lol... love and freedom forever AMERICA'S WAR ON DRUGS IS A WAR ON AMERICANS!!!33
Jim 2 years ago
Notice that our politicians are taking care of our bankers and hedge fund operators first. the very same people that created the economic meltdown that in sept 2008, and demanded that we would have to bail them out or because they sure as hell weren't going to pay for their own mistakes. magically this is all now the little mans fault for buying their junk finance products. And you still think that we have a true democracy? We will never crawle out of this oligarkey until we recognize the love of money (not it's use) is the root of all evil
ThingFish2 2 years ago
I love it. The banks need the proper regulations and guidance because of the huge amount of cash involved with these profit centers. I think the American Bankers Association could have used the same advice before the 09 meltdown. My how the truth spins. At least the banks will have secured their "fair" share of this profit windfall for bonus's and tax breaks while the government finally gets a return from it's failed drug war. High in Colorado is worth the buzz.

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