Feds To Let Pot Shops Use Banks

Reprieve for marijuana businesses seeking access to financial system

  • Share
  • Read Later

The federal government took a significant step Friday toward addressing the marijuana’s industry’s banking problems, issuing guidance designed to help pot shops gain access to the financial system.

Joint memos from the Department of the Justice and the Treasury Department’s Financial Crimes Enforcement Network gave individual banks the discretion to transact with legal marijuana companies, which have been denied access to basic services like checking accounts and credit cards because of federal money-laundering statutes.

The documents outline the steps financial institutions must take if they wish to transact with legal cannabis companies, while reaffirming their obligations to report illicit activity. Taken together, they offer a long-sought roadmap for both the banking and marijuana industries, which have been trying to resolve the problems created by forcing pot shops to hoard huge sums of cash.

The lack of access to basic banking has been the biggest early obstacle for the marijuana industry since Colorado and Washington state legalized marijuana for recreational uses. Managing stockpiles of cash is a complex task that makes it harder for the state to track and tax legal marijuana purchases, and presents serious safety hazards for employees of legal businesses.

[MAGAZINE: Pot’s money problem]

The guidance “clarifies how financial institutions can provide services to marijuana-related businesses,” the Treasury Department wrote. “In general, the decision to open, close or refuse any particular account or relationship should be made by each financial institution.”

Justice Department spokeswoman Allison Price told TIME that the department “shares the concerns of public officials and law enforcement about the public safety risks associated with businesses that handle significant amounts of cash. These guidelines, together with the Treasury Department’s guidance to financial institutions, are intended to increase the availability of financial services for marijuana businesses—that are licensed and regulated—while at the same time preserving and enhancing important law enforcement tools.”

Cannabis groups hailed the documents as a major milestone for the industry. “This is a huge victory for our members, our communities, and the banks that take this opportunity to serve a thriving new market,” said Aaron Smith, executive director of the National Cannabis Industry Association.

Despite the government’s attempt to help the market operate, it is not clear that the memos are a long-term solution to the cash dilemma. The banking lobby has said repeatedly that financial institutions will require greater certainty than the yellow light the government gave Friday to transact freely with cannabis companies. Robert Rowe, a lawyer for the American Bankers Association, told TIME last month that “it would take an act of Congress” for banks to assume the risk. “Put simply: banks need the permanence of law versus changeable guidance,” Colorado Bankers Association CEO Don Childears wrote in an op-ed in the Denver Post last week.

The banking industry reacted cautiously on Friday.

“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, CEO 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.”

The memos make clear that prosecutors retain the right to pursue banks who fail to uphold federal law. They are “intended solely as a guide to the exercise of investigative and prosecutorial discretion,” wrote Deputy Attorney General James Cole, and do “not alter  in any way the Department’s authority to enforce federal law, including federal laws relating to marijuana, regardless of state law.”

The guidance had been anticipated. Attorney General Eric Holder said during a visit to the University of Virginia last month that the department recognized the hazards inherent in forcing cannabis companies to skulk around carrying fat stacks of cash. “It’s an attempt to deal with reality that exists in these states,” Holder said on Jan. 23. “There’s a public safety component to this. Huge amounts of cash, substantial amounts of the cash, just kind of lying around with no place for it to appropriately deposited is something that would worry me from just a law enforcement perspective.”

A bipartisan coalition of lawmakers has crafted legislation designed to ease banking access for pot companies operating in the 21 states, plus the District of Columbia, where either medical or recreational marijuana use is permitted. We need to address the public safety, crime and lost tax revenue associated when legal and regulated businesses are operating in a cash-only system,” Colorado Rep. Ed Perlmutter, a Democrat, wrote recently. Perlmutter has a bill pending that would give full legal clearance for pot shops to receive banking services. But that measure is likely to languish in a divided Congress. 

Until a similar measure passes, the banking issue will remain a looming threat to the growing marijuana industry, which is projected by the market research firm ArcView to add $2.5 billion to the U.S. economy in 2014.

“While we believe today’s guidance should provide banks some of the assurances they need to begin doing business with the marijuana industry, it doesn’t solve all the problems,” said Mike Elliott, executive director of the Medical Marijuana Industry Group. “It is imperative that Congress not view today’s guidance as the ultimate solution to this public safety crisis. Congress must act quickly to solve the problem before we witness a tragedy.”

51 comments
PhillyCannabis
PhillyCannabis

This country is finally moving forward. Next Psychadelics like lsd and mushrooms legalization. And then hopefully prostitution. Christian strangle hold on this country is losing it's ugly grip. 

ImmortalIllumined
ImmortalIllumined

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

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

ReneDemonteverde
ReneDemonteverde

Nothing more shows the dangers and prevalence of pot smoking than the numerous outcry from cannabis filled brain zombies in this comment page. Please be forewarned and see below.

satismaley
satismaley

“It’s an attempt to deal with reality that exists in these states,” Holder said on Jan. 23.


This is very dangerous thinking. If governing based on objective reality becomes common, who knows where we are headed. All of the states may stop arresting adults for using marijuana. People may not drink as much, using the safer alternative. Sick people may be able to get cannabis based medicines that cure epilepsy and alleviate the effects of chemo for tobacco caused cancer. Willie may be able to smoke weed in his bus without getting busted. The horror..... the horror...... where will it all lead?

ReneDemonteverde
ReneDemonteverde

Just ironical that they are promoting marijuana which has more carcinogens than tobacco. A British health study found that 3 sticks of marijuana is equivalent to a pack of cigarettes, a smoker of pot has more chances of throat and gullet cancer according to the British Lung Foundation, and marijuana has 50 % more cancer inducing tar than tobacco. It is not so much as both are not healthy. But the way the government is promoting marijuana will only fool those who are naive and gullible which most be probably liberals/progressives since they are most likely the ones ranting about the benefits of cannabis.

wtfismypw
wtfismypw

"Joint" memos from the Department of Justice..... Yay!

meddevguy
meddevguy

Our President is determined to make sure everybody who wants to get high can with no stupid red tape from those pesky states.The states have as much say in who lights up a joint as they do who can get married in their jurisdiction -- none.


But the real money is in heroin -- I guess we'll call that federal relaxation of those out-of-date drug laws the Philip Seymour Hoffman bill. Actually not a bill -- just an edict is all anything takes anymore -- that "pesky" stuff applies to Congress as well.

AntiIgnorant
AntiIgnorant

@ReneDemonteverde There are also diehard prohibitionists who still believe everything on the subject released in 1937.  Some people are very challenged to evolve.  I am replying to one of them. 


shmuelman
shmuelman

@ReneDemonteverde Everyone who I know who smoked marijuana died from cancer or insanity, or were imprisoned for morally reprehensible acts within 5 years after the first puff. Studies have shown that it reduces IQ in adolescents who smoke it more than ten times by as much as 50%. One day they are studying differential equations, a few months later they are lucky if they can get a job digging ditches. The really bad  thing though, is it will turn liberals (only dissipated liberals smoke marijuana) into actual libtards who will become federal judges who will ban heterosexual marriage.

shmuelman
shmuelman

@meddevguyI believe that if we spend another $500 - $700 billion  on fighting drug use, including random UA's on every American, and increase the penalties for smoking marijuana to a mandatory five years in prison as well as capital punishment for anyone selling any amount of marijuana, we can finally defeat this vicious scourge.I forget whether Obama is a liberal or a despot (or both?) but maybe he would have the courage to implement these laws. It is hard for children when their parents are arrested and imprisoned for drug offenses and they have to live in orphanages or on the street, but I know someday they will thank us for saving them from a family of degenerate drug users.

ReneDemonteverde
ReneDemonteverde

@ImmortalIllumined @ReneDemonteverde  Please forgive the above pothead as his brain is still addled with canmabis smoke. Return after an hour or so and maybe, just maybe he is lucid and sober. Not unless he will try to smoke today his quota for tommorow.

ImmortalIllumined
ImmortalIllumined

@shmuelman @ReneDemonteverde  hahaha, you are a genius, half my family and friends have been growing and smoking their entire lives, all extremely successful, doctors, lawyers, my sister the cpa, you are an idiot, i am crushing you


from 0 states to soon the entire country and world, ride on me

usrnmna
usrnmna

@shmuelman @ReneDemonteverdeEveryone who I know who smoked marijuana died from cancer or insanity, or were imprisoned for morally reprehensible acts within 5 years after the first puff.............Wow, I don't know what your loser friends smoked, but it sure wasn't marijuana, and/or you're making up ridiculous nonsense thinking everybody else is as stupid and profoundly ignorant as you. 



AntiIgnorant
AntiIgnorant

@shmuelman  You clearly are affiliated with law enforcement, prison complex or something of the like.  Or, you are a complete sociopath. 

AntiIgnorant
AntiIgnorant

@shmuelman  You are clearly out of your senses.  We do not treat alcohol users this way and we should not treat pot users this way.  If you want to make a difference, support rehab not prison.  Prison takes a person with a vice and many times turns them into an actual jaded criminal.  Your ancient thinking is the problem in this society.  You have an opinion but no actual knowledge of human nature. 


Do you lock your kid in the closet when they do something you disagree with or do you speak (rehab) with them?

StoptheMadness
StoptheMadness

Are you a parent? Would you turn your own kid or spouse in to the police for your 5 yr mandatory minimum sentence if you found out they were using cannabis?

StoptheMadness
StoptheMadness

Wow, at first I thought you were joking. Locking people up for using a plant that has been used both medicinally and recreationally for thousands of years with literally NO OVERDOSE DEATHS is a good idea?!?! Tearing families apart for 5 years is a better idea for a family than allowing a responsible adult to ingest a god given plant? I think you are confusing cannabis with Crystal Meth or Bath Salts. You are severely uneducated on the science of cannabis, cannabinoids and the endo-cannabinoid system. You can start on Pub-Med.gov. There are over 15,000 studies.

Tommy34684
Tommy34684

@shmuelman Florida did so. The prisons are full of good family men and women. And for what I ask?

usrnmna
usrnmna

@ReneDemonteverde @meddevguy:No study was made, but in most if not all cases, those who are hooked on crack and heroin most started with marijuana...."

PROBABLY?!! But no studies have been made, you spew.  Does it hurt to be so stupid and ignorant.


dmcken
dmcken

and probably smoked tobacco before anything, then drank alcohol.....where is the gateway??which substance do you start with?? the illegal ones?? well typically most start while tobacco and alcohol are illegal for them...you're spewing unsubstantiated facts and in regards to your original comment---people who SMOKE marijuana can increase chance for gum, lung cancer..however thc, the medical benefit of the substance, can be taken via pill form, edibles, and in vaporizing form while tobacco provides no medical benefit whatsoever. Anybody regurgitating unsubstantiated facts these days need to research more...There are more crimes that would be prevented and increased education through legalization and regulation would result in lesser use. Before you say it, no I do not smoke marijuana and I AM A REPUBLICAN--proud to be...im also not a naive individual with blinders on...the benefits to legalization and regulation, in addition to increased legitimate education as opposed to scare tactics far out-weigh a long running war on drugs that have criminalized a generation unjustly. My friend, who is an officer and suffers from PTSD, should have every right to deal w that via a THC pill or edible or vaporizer marijuana intake rather than a highly addictive and incredibly dangerous benzo such as xanax or valium which have resulted in thousands upon thousands of accidental deaths.....RESEARCH!!!!

ReneDemonteverde
ReneDemonteverde

@AntiIgnorant  I cited some findings from the British Lung Association on the dangers of cannabis and I get grief from Antilgnorant. Go figure. Arent you suppose to disprove it ? You are following the First Pothead argument of shifting blame on Dubya who is busy clearing the bushes at his ranch.

StoptheMadness
StoptheMadness

Didn't you know that science is stagnant and we are supposed to keep looking backwards to solve the world's problems?

AntiIgnorant
AntiIgnorant

@ReneDemonteverde  Please excuse the prohibitionist troll above that has no actual legitimate argument for not ending prohibition and whose mental faculties limit them to mere trolling.  

ReneDemonteverde
ReneDemonteverde

@StoptheMadness  When you are in shallow discussion with pot filled brains like some commenters here, what would you do ? Either ignore them and move to other pot filled brain zombie or engage them in fun filled arguments, which lightens the day.

StoptheMadness
StoptheMadness

You seem to think insult is an effective form of debate. It isn't.

AntiIgnorant
AntiIgnorant

@ReneDemonteverde @usrnmna @shmuelman  Nobody smokes pot and says "dang, I really need to try heroin"... doesn't happen.  Period. 


Now, forcing pot users into the black market to buy pot versus having the ability to by it in a safe legal shop like alcohol... now that opens up the gateway aspect.  Why?  Because it puts the pot smoker in proximity to a DRUG dealer who wants to sell a higher margin drug... like heroin.


If alcohol users had to go to the same black market... it would be the same story.  The illegal status of pot is the TRUE gateway.  Period. 


Our wonderful government has created any gateway effect that exists.  Pot isn't the issue.


ReneDemonteverde
ReneDemonteverde

@usrnmna @shmuelman @ReneDemonteverde  Why dont you stop hyperventilating and take a deep breath. Nobody is stopping you even if you jam a joint up your butt and start puffing there. Just read the contradicting report and think about it. Cannabis is usually a gateway drug, more than cigarette or alcohol. Studies found that as usage goes on after a length of time a person looks for more heavier drug.

StoptheMadness
StoptheMadness

Good point. Spending billions of tax payer dollars each year to stop otherwise law abiding citizens from consuming a god given plant, locking them up, making them second class citizens, supporting a drug war that gives all the power to drug cartels who don't check your kids for ID and actually recruit kids to sell to kids, push harder drugs on people like meth and heroin, kill tens of thousands of people a year in Central and South America because profit margins created by prohibition are so insanely high it's worth murdering people to protect their profits... instead taxing and regulating generating billions to spend on things like say education and fighting poverty.... Yes, that seems like sensible policy.

ReneDemonteverde
ReneDemonteverde

@StoptheMadness  No but I want you to appear more intelligent than you really are. By the way you should change your name to Continue the Madness. Seems like your endorsement of the legalization of marijuana suits you more that way.

StoptheMadness
StoptheMadness

You seem to think adding "just kidding" to your comments makes you sound less ignorant. It does not.

ReneDemonteverde
ReneDemonteverde

@AntiIgnorant @shmuelman  He was the former drug czar under Clinton. Or maybe you just do not read newspapers. When you reach that point where you smoke pot first thing in the morning instead of drinking coffee and watch the news development, you got a real problem, my friend. {Just Kidding}

StoptheMadness
StoptheMadness

I discovered the truth a few years ago myself. It's staggering how much science there is out there proving cannabis to be an incredibly useful plant. Somehow the ability to effectively process new information seems to elude a BLP like Rene.

dmcken
dmcken

What was sensible about that comment?? 5 year minimum sentence for usage of cannabis plant that has been proven to have medicinal benefit and a capital punishment for selling it when the United States has a patent currently out since 2002 in regards to the medical benefits of cannabis(or the THC/Cannaboid receptors to be exact). You need to research and not just google disproven theories. You mention no good family person can smoke marijuana nor any successful business man/woman. I would encourage you to look up Bill Gates--you may have heard of him, he is a well known business man and family man and pro legalization and mj user. Steve Jobs? similar story during his storied life. The list goes on, and on, and on....if you believe that comment to be sensible then you should feel the same in regards to anybody who drinks a glass of wine at the dinner table with their children---or better yet, we should imprison anybody who purchases McDonalds for their children to mandatory jail sentences and take the children out of the home due to the horribly addictive food enhancers in addition to all the other garbage put into those foods. RESEARCH RENE AND SHUELMAN--what you are stating has been disproven time, after time, after time.....the hardest thing to do is to look at something you've been told your entire life and have the ability to look at another point of view with an open mind. In a course I took back in school marijuana legalization debate was the topic. My argument was against it, due to many reasons I had heard throughout time...elevated heart rate, tachicardia and amotivational syndrome...some of which have a level of relevance and fact, others just being misleading false statements. I used the analogy that due to an increased heart rate in addition to staying in your system for that long of a shelf life(1 week- 30 days + depending on usage and body type) that an athlete could smoke marijuana on a Monday and have a reaction on a Friday that could cause death. Needless to say, the topic was heavily discussed on both angles and I decided to research all the facts I thought I knew vs facts that were mentioned to me from the opposing viewpoint. I spoke to the Head of Addictions therapy at a mental health hospital in South Indianapolis and researched the amount of funds spent on prosecuting marijuana users. The results are truly stunning when you look into marijuana legalization with no bias towards either way. Scare tactics to attempt people to not use has backfired as more youths realize they have been lied to which makes them feel more confident in their belief that its okay--even though their brain is still developing therefore they should not begin to consider marijuana until after 21---probably even 25---the medicinal benefits are incredible when you research...shrinkage of cancerous cells, assisting appetite for individuals suffering from multiple diseases from Chrons to HIV, a safe approach to PTSD treatment for soldiers, officers, and anybody else suffering. Finally, marijuana would be a better recreational substance to use responsibly than alcohol for many reasons...I wish we lived in a world of people who could deal with life on lifes terms and not need anything at all...but we dont--therefore if we are going to have a society that has alcohol controlled, taxed and regulated then we need to do the same with marijuana---its safer that way and allows for legitimate education...I very much encourage all of you reefer madness quoters to do some up to date research

ReneDemonteverde
ReneDemonteverde

@StoptheMadness  I would turn you in if I caught you using cannabis. {Just kidding} Go on take another puff, then another then another. 

Tommy34684
Tommy34684

Tkulaga did not suggest good family men do not use pot.

AntiIgnorant
AntiIgnorant

@ReneDemonteverde @tkulaga @shmuelman  Family men and women use alcohol.  HYPOCRITE!  Pot is safer.  Get over yourself.  You are just restating the same antiquated nonsense that has been around since 1937.  It's over, all rational people with access to information understand that prohibition is a FAILURE.

ReneDemonteverde
ReneDemonteverde

@tkulaga @shmuelman  No such thing as good family men and women. If they are good family men or women they would not be in prison. You dont use drugs if you think of your family. 

ReneDemonteverde
ReneDemonteverde

@AntiIgnorant  Comma, then the BUT. Usually continued usage of cannabis have less and less effect euphoria on the user unless he starts puffing more and more. Until he reaches for heavier, much heavier drugs like cocaine or heroin. Try that with cigarette and lung cancer will probably get you first. Try that with alcohol and liver damage will send you either to the hospital or cemetery first. 

AntiIgnorant
AntiIgnorant

@ReneDemonteverde @usrnmna @meddevguy  Nobody smokes pot and says "dang, I really need to try heroin"... doesn't happen.  Period. 


Now, forcing pot users into the black market to buy pot versus having the ability to by it in a safe legal shop like alcohol... now that opens up the gateway aspect.  Why?  Because it puts the pot smoker in proximity to a DRUG dealer who wants to sell a higher margin drug... like heroin.


If alcohol users had to go to the same black market... it would be the same story.  The illegal status of pot is the TRUE gateway.  Period. 


Legalize and stop the lies already.

ReneDemonteverde
ReneDemonteverde

@usrnmna @ReneDemonteverde @meddevguy  Speaking of experience. Many of acquaintances and friends who are heavy drug users smoked marijuana in the 60s. So let me be calm and explain some facts of life before I call you an idiot. A person does not jump to crack cocaine or heroin without starting on a lighter drug. They dont go from cigarette or alcohol and start on cocaine or heroin although some does.