Federal government to set new regulations allowing banks to serve marijuana sellers

Tuesday, February 04, 2014 by: Jonathan Benson, staff writer
Tags: banks, marijuana sellers, federal government

(NaturalNews) Champions of states' rights may have even more to get excited about as the federal government announces plans to back off and allow cannabis businesses in Colorado and Washington to access and use banking institutions. Politico.com reports that the Obama administration will soon unveil updated federal guidelines for how newly established recreational marijuana dispensaries can safely deposit cash and perform other banking transactions without violating federal money laundering laws.

Since cannabis is still regarded by the U.S. Department of Justice (DOJ) as a Schedule I drug, recreational marijuana shops in states where the plant is now legal have had to navigate uncharted waters as far as local, state and federal laws are concerned. Though Attorney General Eric Holder made it clear that the Drug Enforcement Agency (DEA) would not be prosecuting legal cannabis businesses in either Colorado or Washington, these same businesses have still been restricted from using banks to deposit their revenues.

But this could all soon change, as the federal government has agreed to allow individual states the freedom to enforce their own laws and regulations with regard to cannabis policy, even when such policy conflicts with federal law. This, after all, is how our constitutional republic is supposed to work -- whatever is not specifically spelled out as a responsibility of the federal government should be left up to the states, including the free use by a free people of a plant with limitless therapeutic potential.

Federal law currently prohibits banks from dealing with cannabis-related businesses

Of particular concern are antiquated money laundering provisions that bar cannabis-related businesses from using banks. As it currently stands, all those "pot shops" selling cannabis in accordance with the provisions of Amendment 64 in Colorado, for instance, have nowhere to deposit their large reserves of cash, which Holder recently admitted publicly is not going to work.

"You don't want just huge amounts of cash in these places," stated Holder before a crowd recently at the University of Virginia. "They want to be able to use the banking system. 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."

The banks, of course, are only trying to protect themselves by refusing to deal with the burgeoning cannabis industry. But not having a legitimate outlet for sorting out the financial aspects of the legal marijuana market will only create the very same types of problems that existed within the prohibition paradigm.

"[A] lot of legal companies... are forced to resort to the type of shadowy capers that you might find in a gangster movie," stated Alex Altman from TIME magazine to PBS' Hari Sreenivasan during a recent interview. "I have talked to owners in Denver, dispensaries who lease secret, off-site warehouses to store their cash, who carry around tens of thousands of dollars on their person pretty much every single day, who are forced to foot tens of thousands of dollars tax bills in stacks of twenties."

"[I]t is a situation for them that presents challenges that are both difficult in terms of cash management, and dangerous in terms of personal safety."

Sources for this article include:

http://www.pbs.org
[Click here if PBS link not working]

http://www.politico.com

http://www.huffingtonpost.com