While it is now legal to sell recreational marijuana in Colorado and Washington state, businesses looking to do so have run into a new problem: they don’t have access to the American banking system.
That’s because selling marijuana is still illegal under federal law. While the Obama administration has said it will not interfere with businesses selling weed for recreational purposes in Colorado and Washington, it has not given the same assurances to banks. That means banks could face charges of money laundering or even lose their charter for dealing with marijuana businesses.
That could all change soon. Yesterday, Attorney General Eric Holder said that the administration will soon release guidance for federal prosecutors “not to prioritise cases involving legal marijuana businesses that use banks,” according to the New York Times.
“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Holder said. “There’s a public safety component to this. Huge amounts of cash, substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited, is something that would worry me, just from a law enforcement perspective.”
It’s unclear whether this guidance will be enough to convince banks to begin accepting deposits and issuing credit cards to marijuana businesses. Banks had wanted strict legal guidelines from the government – such as a safe harbor provision – that would have guaranteed that they would not be prosecuted.
Since January 1, many marijuana businesses across Colorado have had to deal entirely with physical cash, storing it in vaults and paying their workers with envelopes of money. This has made them a prime target for robbery and has forced many business owners to hire armed guards and vans to move the money to safe locations. They have been asking the Obama administration for months to issue guidance to allow them access to the banking system.
That guidance is now imminent. Whether it will be good enough to accomplish that goal is yet to be seen.
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