Got Bank? Election Could Ereate Flood Of Marijuana Cash With No Place To Go

By Lisa Lambert

Although the sale of marijuana is a federal crime, the number of U.S. banks working with pot businesses, now sanctioned in many states, is growing, up 45 percent in the last year alone.

Still, marijuana merchants say there are not nearly enough banks willing to take their cash. So many dispensaries resort to stashing cash in storage units, back offices and armored vans.

Proponents believe the Nov. 8 election could tip the balance in favor of liberalizing federal marijuana laws, a move seen as key to getting risk-averse banks off the sidelines.

Measures on ballots in California, Florida and seven other states would bring to 34 the number of states sanctioning pot for medical or recreational use, or both. That could push annual sales, by one estimate, to $23 billion.

The prospect for a market of such scale is adding urgency to calls for a national approach to marijuana that expands banking options. Law enforcement and Federal Reserve officials have expressed concern about the fraud and crime associated with un-bankable cash.

Nearly 600 dispensary robberies have been reported in Denver since recreational pot was legalized in Colorado three years ago.

“There’s not a single human being who thinks there is any benefit at all in forcing marijuana business to be conducted on an all-cash basis,” said Rep. Earl Blumenauer, a Democrat from Oregon who has called for the decriminalization of marijuana since coming to Congress in 1996.

 

Federal Reserve Blocks ‘Marijuana Bank’ in Colorado

COLORADO: Marijuana-related businesses in Colorado are so profitable that the government doesn’t know what to do with all of the tax revenue they’re generating. But business owners face a more immediate problem: Where to stash their own profits when banks won’t take it.

Because marijuana is a federally banned Schedule I substance, most banks have been reluctant to accept deposits from industry businesses. A  clumsy and ambiguous set of guidelines from the federal government, which at least seemed to indicate that banks working with dispensaries operating legally under state law would be shielded from money laundering prosecution, didn’t help.

Now the Federal Reserve is muddying the waters further with a court filing against the Fourth Corner Credit Union, which was established specifically to handle Colorado’s marijuana cash, according to NBC News:

The credit union can’t open without clearance from the Federal Reserve, which said in its filing that “transporting or transmitting funds known to have derived from the distribution of marijuana is illegal…”

The Federal Reserve said in the latest filing that bankers won’t be led away in handcuffs for taking marijuana money, but they don’t have the right to put that money in the Federal Reserve system.

By pushing for approval from the Fed, it was “as if Colorado enacted a scheme to allow trade in endangered species or trade with North Korea,” the filing says.