Governor: Colorado Pot Market Exceeds Tax Hopes

COLORADO:  Colorado’s legal marijuana market is far exceeding tax expectations, according to a budget proposal released Wednesday by Gov. John Hickenlooper that gives the first official estimate of how much the state expects to make from pot taxes.

The proposal outlines plans to spend some $99 million next fiscal year on substance abuse prevention, youth marijuana use prevention and other priorities. The money would come from a statewide 12.9 percent sales tax on recreational pot. Colorado’s total pot sales next fiscal year were estimated to be about $610 million.

Retail sales began Jan. 1 in Colorado. Sales have been strong, though exact figures for January sales won’t be made public until early next month.

The governor predicted sales and excise taxes next fiscal year would produce some $98 million, well above a $70 million annual estimate given to voters when they approved the pot taxes last year. The governor also includes taxes from medical pot, which are subject only to the statewide 2.9 percent sales tax.

A Marijuana Tidal Wave?

The marijuana industry just got a critical boost in its effort to become a massive and completely legitimate business.

On Friday, two federal law-enforcement agencies released coordinated statements clearing the way for banks to take deposits from and offer financial services to marijuana producers and retailers without fear of prosecution for money laundering.

To say that this will ignite a revolution in the still upstart industry would be an egregious understatement.

“It is imperative that this legal industry have access to banking the same as every other business sector,” said Mike Elliot, executive director of the Medical Marijuana Industry Group. “To continue doing business on a largely cash basis creates serious safety issues for owners, employees, and customers.”

 

The Feds’ Scary Reassurances To Banks That Deal With State-Licensed Marijuana Businesses

DISTRICT OF COLUMBIA:  On Friday the Treasury Department and the Justice Department issued guidelines for banks that do business with state-licensed marijuana suppliers. According to Attorney General Eric Holder, the aim of the memos is to reassure financial institutions that are leery of accepting cannabusinesses as customers because they worry it will attract unwanted attention from federal regulators and prosecutors.

But as with the August 29 memo in which Deputy Attorney General James Cole said that prosecuting properly regulated marijuana growers and sellers would not be a high priority, there are no guarantees, and that fact is likely to deter traditionally cautious banks more than plucky cannabis entrepreneurs. [Read more…]

Banks Get A Primer On Pot Money

DISTRICT OF COLUMBIA:  The Obama administration, taking the first regulatory step to accommodate the country’s growing state-approved marijuana businesses, issued guidelines Friday designed to bring dispensaries into the banking system and end their risky reliance on stashing large amounts of cash.

The step was a cautious one, reflecting conflicting pressures on the administration.

On one side, many states now allow the sale of marijuana for medical or recreational use. Atty. Gen. Eric H. Holder Jr. said last month that law enforcement agencies were increasingly concerned about marijuana sellers who are forced to deal in cash because the banks’ unwillingness to deal with them prevents them from using credit cards. [Read more…]

Banking Marijuana Requires “Act Of Congress”

DISTRICT OF COLUMBIA:  Despite bankers’ varied attitudes about legalizing marijuana, now that it is legal in Colorado, banks are supportive of government efforts to permit financial services for marijuana businesses. However, numerous obstacles prevent banks from serving marijuana businesses and their customers as they conduct legal activities.

Colorado can’t regulate or tax an industry for which it cannot track money. Public safety risks associated with cash-heavy businesses cause concern. And several federal laws preclude banks from serving these businesses, regardless of state law. Only Congress can resolve this. [Read more…]

Banking Marijuana Requires “Act Of Congress”

DISTRICT OF COLUMBIA:  Despite bankers’ varied attitudes about legalizing marijuana, now that it is legal in Colorado, banks are supportive of government efforts to permit financial services for marijuana businesses. However, numerous obstacles prevent banks from serving marijuana businesses and their customers as they conduct legal activities.

Colorado can’t regulate or tax an industry for which it cannot track money. Public safety risks associated with cash-heavy businesses cause concern. And several federal laws preclude banks from serving these businesses, regardless of state law. Only Congress can resolve this. [Read more…]

Attorney General Holder: Feds To Let Banks Handle Pot Money

DISTRICT OF COLUMBIA:  The Obama administration will soon announce regulations that allow banks to do business with legal marijuana sellers, Attorney General Eric Holder said Thursday.

“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Holder said during an appearance at the University of Virginia’s Miller Center. “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.” [Read more…]

Attorney General Holder: Feds To Let Banks Handle Pot Money

DISTRICT OF COLUMBIA:  The Obama administration will soon announce regulations that allow banks to do business with legal marijuana sellers, Attorney General Eric Holder said Thursday.

“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Holder said during an appearance at the University of Virginia’s Miller Center. “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.” [Read more…]

Cash-Only Cannabis: Colorado Pot Shops Work Through Financial Hiccups

COLORADO:  While the sale of recreational-use marijuana is now legal in Colorado, its status as illegal under U.S. law is leading to complications for vendors, who can’t use the federal banking system to do business.

When so-called “pot shops” opened up legally in Colorado last week, one thing they couldn’t offer shoppers was the ability to pay via credit card.

Due to differences in state and federal law regarding marijuana’s legality as well as legal concerns of the banking industry, these groundbreaking businesses, which drew national attention and more than $5 million in sales in the past week, can’t use the federal banking system. Which means that they’re stuck doing business—everything from taking customer payments to paying employees—in cold, hard cash.

“There is absolutely no justifiable reason to allow this threat to public safety to continue in those states where the regulated sale of marijuana has been made legal,” Betty Aldworth, deputy director of the National Cannabis Industry Association (NCIA), said in a statement ahead of the launch of Colorado’s legal dispensaries.

 

State-Owned Bank Won't Work For Marijuana Cash

WASHINGTON:  Efforts by Washington state legislators to create a state-owned bank that would cater to the newly legal marijuana industry won’t work in Colorado — or in Washington, for that matter — industry and legal experts say.

That’s because federal law is specific in its prohibition against commercial banks from accepting deposits they suspect are the profits of illegal activity. And the marijuana trade in federal legal terms is still illegal. [Read more…]