Big U.S. Banks Seek New Clarity On Risks Of Marijuana-Linked Accounts

MISSOURI: Major banks are getting increasingly wary of some transactions with smaller banks that have begun to allow marijuana businesses to open accounts. Officials at the bigger institutions say they fear being in breach of anti-money laundering laws and are pressing federal authorities to make it clear what is legitimate and what is illegal.

The problem arises because in Colorado and Washington states, marijuana for general use is legal, and in a host of other states it is legal for certain medicinal purposes. But the business is still illegal under federal law, and U.S. banks are required to report transactions that they suspect involve money earned through illegal activities.

The bankers, including anti-money laundering officials at three of the biggest U.S. banks, expressed concern that their firms could face civil and even criminal penalties not only for dealing with any of the businesses directly but also handling money from the estimated dozens of small and mid-sized banks that have begun working with the marijuana shops or their suppliers.

The bankers say the U.S. Treasury Department’s anti-money laundering unit needs to clarify its expectations for the handling and reporting of wire transfers and other payments that involve people and entities linked to state-sanctioned marijuana businesses.

Colorado Lawmakers Shy Away From Pot Bank

COLORADO:  A Colorado plan to set up the world’s first financial system for marijuana survived less than 24 hours before state lawmakers changed course Thursday night and shelved the idea.

The proposal would have allowed state-licensed marijuana businesses to create a financial co-op, sort of an uninsured credit union.

The measure was introduced late Wednesday and cleared a House committee on Thursday. But a few hours later, another House committee gutted the plan by amending the bill to say that Colorado will continue studying the problem of marijuana businesses having a hard time accessing banking services.

Lawmakers from both parties expressed reservations about whether the financial-services plan would work.

“Let’s take some time to have this properly vetted,” said Rep. Kevin Priola, R-Henderson, who sponsored the amendment to study the matter.

 

Treasury Defends Rules On Banks, Marijuana Sellers

DISTRICT OF COLUMBIA: Treasury Secretary Jack Lew on Tuesday defended the Obama administration’s guidelines to banks conducting transactions with legal marijuana sellers as congressional Republicans questioned whether the guidance amounts to tacit federal approval of a drug illegal in most states.

The Justice and Treasury departments issued a roadmap in February that would allow the new businesses to make payroll, save money and pay taxes, a move that enables the legalized marijuana industry to operate in Colorado and Washington state. In 2012, the two states became the first to approve recreational use of marijuana.

Rep. Hal Rogers, R-Ky., chairman of the House Appropriations Committee, challenged Lew at a hearing, questioning whether guidance to banks on doing business with legal marijuana sellers represents a “rubber-stamp” by the federal government for a predominantly illegal activity.

“Without any guidance, there would be a proliferation of cash-only businesses, and that would make it impossible to see when there are actions going on that violate both federal and state law and that … would be a real concern,” Lew told the House subcommittee on financial services. “We thought that the clarity, bringing it into daylight, was a better solution.”

Shunned By Banks, Colorado Pot Retailers Beef Up Security To Protect Cash

COLORADO:  In Colorado, sales of recreational pot have been legal for nearly two months, but federal law still brings a major obstacle: Banks won’t take the money. Marijuana retailers are going to great lengths to keep their cash safe.

As marijuana green makes a lot of that other green, it can be both good news and bad news for business owners.

At the pot store called The Health Center, director of operations Tiffany Goldman is nervous. “Security is probably the most important thing that we have to think about in this industry,” Goldman said.

So armed guards transport plants, check IDs and, most importantly, keep an eye on the money.

Buying Marijuana With A Credit Card Just Got Easier

The recently released guidelines from the Department of Justice and Treasury are being heralded as finally giving the go-ahead to banks to allow the legalized marijuana industry to bank like any other enterprise.

Basically, the government declared that chasing those involved with the newly legal pot business is definitely not at the top of its priority list.

Banks aren’t the only financial entities standing in the way of the fledgling pot industry — credit card companies Visa, MasterCard, and American Express Company have been reluctant to allow their cards to be used for the purchase of legal weed — but, that may now change. [Read more…]

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…]

US Government Issues Rules For Banks On Dealing With Legal Marijuana Vendors

DISTRICT OF COLUMBIA:  The Obama administration issued new rules Friday intended to ease the concerns of banks wanting to deal with businesses that legally sell marijuana, something the nation’s banks have so far declined to do.

The rules, issued by the Treasury and Justice Departments, are intended to “move from the shadows the historically covert financial operations of marijuana businesses,” said Jennifer Shasky Calvery, director of Treasury’s Financial Crimes Enforcement Network. [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…]