Colorado’s soon-to-launch retail marijuana stores might soon be spared the risk and hassle of dealing only in cash, as the U.S. Treasury Department is expected to issue a memo to banks allowing them to work with such businesses under strict guidelines.
As is, banks generally refuse to allow pot businesses to open accounts, apply for loans or conduct transactions with credit or debit cards, citing rules prohibiting them from dealing with money from illicit operations.
Although legalized in Colorado and Washington, marijuana is illegal under federal laws.
“The fundamental problem remains: No matter what else happens, until Congress changes the law and declassifies marijuana as a controlled substance, any bank that offers products or services to a marijuana dispensary would be subject to prosecution for violating federal law,” said Robert Rowe of the American Bankers Association in Washington, D.C., in an interview with the Denver Post.
“Bankers continue to tell us that the risk from prosecution is still too great.”
But state officials told the Post that the Treasury and Justice departments are working on a document meant to allay some fears.
The Justice department issued a similar memo in August, saying federal prosecutors would give states that legalized marijuana leeway to implement the new laws as long as they adhered to strict guidelines. Those include measures to ensure pot doesn’t get into the hands of kids and doesn’t get smuggled out of state, among other requirements.
“It’s the best piece of news we’ve heard in quite some time,” Mike Elliott, the director of the Medical Marijuana Industry Group, told the Post. “Banking is the most serious issue that is still unresolved. We need answers now for public safety and accountability reasons.”
Earlier, some Denver City Council members expressed concern for the grand opening of several pot shops on Jan. 1, specifically citing the large crowds and the abundance of cash that will change hands. Denver police plan to increase patrols around marijuana stores in the first few days of retail sales, but have also said they won’t allow off duty officers to moonlight as security guards inside the stores. Police officials cited the same problem as the banks — that marijuana is federally prohibited and the stores are still at risk of a raid by Drug Enforcement Administration agents.
Even if Treasury gives the nod to banks that it’s OK to work with marijuana stores, it might not be enough for some bankers.
“For the majority of banks, no, it won’t be good enough,” Barbara Walker, executive director of the Independent Bankers of Colorado, told the Post. “But there are banks, without mentioning names, who already have these businesses as clients, and they’ve been banking quietly. This gives greater comfort to that relationship.”
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