Attorney General Eric Holder announced on Friday that the U.S. Treasury and law enforcement agencies will soon outline regulations that will allow banks provide services to state-sanctioned cannabis businesses.
Although marijuana is legal for recreational use in Washington state and Colorado and is permitted for medical uses in 21 states and the District of Columbia, banks have been blocked from doing business with the industry because pot remains classified as an illegal narcotic under federal law.
The lack of financial services has forced newly licensed recreational pot retailers in Colorado and medical marijuana dispensaries in other states to operate as cash-only businesses, which has opened the door to a whole host of potential problems, including robbery and money laundering.
Recognizing this, Holder told an audience at the University of Virginia, “You don’t want just huge amounts of cash in these places.”
“There’s a public safety component to this,” he said. “Huge amounts of cash — substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited — is something that would worry me just from a law enforcement perspective.”
“The public safety issue is a real concern,” Kevin Oliver of The National Organization for the Reform of Marijuana Laws told The Daily Caller News Foundation. He said that people walking around with hundreds of thousands of dollars in briefcases and that it makes business owners prime targets for robbers.
But not only will these regulations make the pot industry safer, says Oliver, “It will make the industry more transparent and credible.”
It is very difficult to track transactions and revenue streams in cash-only businesses, making pot retail companies very difficult to tax. “It is easy not to be honest about your finances” when you are just operating with cash, explained Oliver. The promise of a new taxable industry was what compelled some Colorado and Washington voters to put legalizing recreational marijuana use on the ballot.
And Oliver expects that once the regulations are officially released, perhaps at the end of this month or early February, marijuana businesses will grow exponentially.
“This is the green light that a lot of businesses have been waiting for,” he said.
Starting this month licensed pot entrepreneurs in Colorado were granted permission to set up retail shops. In this short time, Colorado’s open-armed pot policy has attracted international tourists and aspiring businessmen and women looking to take part in a fledgling industry.
Sometime this year Washington will join Colorado in granting licenses to pot retailers – California, Oregon and Alaska will consider doing the same when voters go to the ballot box later in 2014.
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