Colorado’s pot sellers are open for businesses, seeing brisk sales after recreational marijuana became legal under state law on New Year’s Day. What those stores do with the revenue they bring in, however, is a different question—one that’s gaining salience and attention as more and more legal pot businesses open up shop.
Anti-money laundering rules forbid banks from processing payments or holding accounts for businesses that deal in drugs, which remain illegal under federal law. That has left pot businesses forced to operate largely in cash, hauling bags of bills in to pay state taxes and manage their books. As marijuana legalization spreads, with Washington state adopting recreational use and other states embracing medical uses, more businesses will face this cash conundrum.
The governors of Colorado and Washington have pressed federal bank regulators to let financial institutions open accounts for businesses that follow the state’s pot regulations, and yesterday the Denver City Council passed a resolution “urging swift federal action to provide guidance for banking and other financial institutions to serve legal marijuana businesses.”
They’re seeing similar clarity in the banking world that the Justice Department has already provided in saying it generally won’t pursue criminal drug cases against businesses or users who follow state laws. In August, the department that it could decide to bring cases if a situation violates any of eight conditions, such as failure to prevent sales to minors or to customers who illegally resell pot over state lines.
The Justice Department is already working on a comparable memo to provide some guidance for banks, the Wall Street Journal reports, but whether it will provide enough clarity for the banks to feel comfortable isn’t yet clear. Other agencies involved in the discussion include: the Financial Crimes Enforcement Network, the Federal Deposit Insurance Corp., the Federal Reserve Board, the Office of the Comptroller of the Currency, and the National Credit Union Administration.
In Washington, meanwhile, Bob Hasewaga and three other state senators have submitted a bill to create a state-run bank that would be the sole depository for Washington’s marijuana businesses. Hasegawa acknowledges that the bill is a long-shot but argues that pot businesses need a solution. “They are hoping against hope that the Treasury department and the financial regulators are going to come up a letter similar to what the U.S. attorney general produced,” he said. “The only alternative right now is cash-based, which is totally unacceptable and cannot adhere to the attorney general’s guidelines because it can’t track every last dollar.”
