Despite recent actions to the contrary, the federal government may be looking for a way to let banks and pot providers work together in legal peace.
Forcing Dispensaries To Use Cash
Two years ago, the feds actively forced banks across the country to stop helping dispensaries across the country. Dispensary operators were left with no choice but to operate strictly in cash, carrying large amounts of it on dangerous trips.
Then, this August, the Drug Enforcement Administration threatened sanctions against armored car personnel and private guards who work for medical marijuana dispensaries. That meant operators had to make those trips with no protection.
Taking A Federal Turn
Medical pot providers could be forgiven for thinking the feds had turned on them forever. But in fact the Obama administration seems to be doing a rather sudden about-face.
On Aug. 29, the Justice Department – which oversees but only barely controls the DEA – told the governors of Colorado and Washington that it’s “actively considering” ways to regulate dealings between banks and pot shops.
For the time being, that means financial institutions that work with pot providers are unlikely to be prosecuted for money laundering or federal drug crimes. But to avoid prosecution, they must observe eight federal priorities laid out by the DOJ.
States, pot shops and financiers who comply with these priorities will essentially be left alone by federal authorities, according to a new pot policy announced by Justice Aug. 29. They include:
- Keeping weed away from minors
- Keeping marijuana money from going to criminal enterprises
- Keeping legal pot from flowing to other states
- Preventing trafficking of other drugs or other illegal drug activities
- Preventing violence and the use of firearms
- Preventing drugged driving and similar negative public health consequences of marijuana use
- Preventing cultivation on public lands
- Preventing possession or use on federal property
Banks that follow these priorities will be allowed to do business with legal pot providers, according to the Huffington Post. A DOJ official who spoke to the Web site didn’t rule out all prosecutions, but the new policy is a major turn-around.
The announcement that states may legalize weed without federal interference, a dramatic pivot in the war on drugs, indicated that the feds consider financial regulation of the marijuana market a potential benefit of legalization – one on which they intend to capitalize.
Among other positive outcomes, a lenient federal approach to legalization would mean “replacing an illicit marijuana trade that funds criminal enterprises with a tightly regulated market in which revenues are tracked and accounted for,” according to the memo.
Tracking and accounting for revenues in a tightly regulated market would be next to impossible without the involvement of a professional financial system. Financially speaking, an all-cash legal cannabis business is just one step removed from the black market.
“We need to address the public safety, crime and lost tax revenue associated when these legal and regulated businesses are operating in a cash-only system,” U.S. Rep. Ed Perlmutter (D-Col.) said in a statement. Perlmutter holds a senior position on the House Financial Services Committee.