Marijuana legalization stands to gain historic ground on election day, but federal law continues to scare away banks from serving the industry.
More banks are accepting accounts from marijuana vendors, up 45 percent from the previous year, but the industry still struggles to find broad support from banks. Federal law, which criminalizes the drug, is at odds with a growing number of state laws, leaving a legal gray area that keeps many banks at bay. Vendors are resorting to all-cash operations and store their money in safes, offices, storage units and even armored vans, reports Reuters.
“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,” Earl Blumenauer, a congressman from Oregon, told Reuters.
All-cash operations are leaving many vendors open to increased risk. Dispensaries have been robbed 600 times in Denver since the state legalized marijuana in 2012. A directive from the Department of Justice in 2014 said it would not prosecute banks that served a state’s legalized marijuana industry. The Department of the Treasury, however, still requires banks to report potential drug crimes.
“This was a problem created by federal law,” Tom Dresslar, spokesman for the California Department of Business Oversight, told Reuters. “It needs a federal solution.”
Nine states are gearing up for ballot votes on legalization for recreational and medical purposes Nov. 8 which advocates hope will put greater pressure on the federal government.
The ballot initiative in California is getting the most attention, as it polls at an approval rating of 59 percent and promises to rake in enormous revenues for the state. Proposition 64 would allow anyone over 21 to possess one ounce of marijuana and grow up to six plants in their home. The 15 percent tax on all marijuana sales could earn the state more than $1 billion in annual revenue.
Many states are following California’s example, which means a push for national legalization could come next. Legalization nationwide would rake in $28 billion in annual federal and state revenue, according to a study by the Tax Foundation.
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