With marijuana now legal — at least for medical purposes — in more than half the states, a small but growing number of federally insured banks have allowed pot retailers and other legitimate marijuana-related businesses to open accounts. Still, some 97% of U.S. banks won’t work with these companies over concerns about the regulatory ramifications, which is why a number of U.S. senators are asking the Treasury Department’s financial crimes division to help the marijuana industry — particularly those businesses that service the industry — move away from being purely cash operations.
Last month, a group of ten senators — including Elizabeth Warren (MA), Bernie Sanders (VT), Al Franken (MN), and Jeff Merkley (OR) — sent a letter [PDF] to the Acting Director of the Financial Crimes Enforcement Network (FinCEN), arguing that having pot-related businesses dealing only in cash “jeopardizes community safety, limits economic growth, and greatly expands the opportunity for tax fraud.”
In 2014, the Justice Department and FinCEN provided guidance to the banking industry about how these institutions could legally do business with marijuana growers and retailers in states where these operations are legal.
However, the letter points out that this guidance does not provide enough clarity when it comes to “indirect” marijuana businesses — those companies that aren’t directly involved in pot products, but provide services to the companies that are.
This group includes chemists who do testing for marijuana producers; private security firms who protect the product and the large amounts of cash involved; and lawyers who represent marijuana companies.
“Most banks and credit unions have either closed accounts or simply refused to offer services to indirect and ancillary businesses that service the marijuana industry,” claims the letter. “A large number of professionals have been unable to access the financial system because they are doing business with marijuana growers and dispensaries.”
Unable to bank, these indirect services have — according to the letter — lost their retirement accounts, and had to pay their employees and taxes in cash.
“Locking lawyers, landlords, plumbers, electricians, security companies, and the like out of the nation’s banking and finance systems serves no one’s interest,” write the senators, who are asking FinCEN for new guidance to “enhance the availability of financial services for indirect businesses that service the marijuana industry.”
Though 28 states have now legalized marijuana to some degree, the product still remains not only illegal at the federal level, but a Schedule I controlled substance on par with heroin.
At the same time, federal law prohibits — for the time-being — the Justice Dept. from spending money prosecuting medical marijuana in states where it’s been legalized.
The future of legalization remains to be seen, but President-elect Trump’s nominee for Attorney General, Sen. Jeff Sessions (AL), is outspoken in his distaste for the drug, calling it “dangerous” and commenting that “good people don’t smoke marijuana.”
In addition to Warren, Sanders, Franken, and Merkley, the following senators signed the letter to FinCEN: Lisa Murkowski (AK), Ron Wyden (OR), Kirsten Gillibrand (NY), Patty Murray (WA), Angus King (ME), and Cory Booker (NJ).
[via AP]
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