Legal Pot’s Cash Conundrum

pot_shopOn Sunday February 16th, I bought legal weed for the first time from a recreational cannabis store in Denver, Co.  I spent a few minutes speaking with some of the employees, as I was eager to hear how things were going under this newly sanctioned marijuana market.  Unsurprisingly, business was great.  Some items were selling quicker than others, but everyone was in agreement that the rollout of Colorado’s legal cannabis retail system had been a great success, except for one crucial component that was as unsettling as it was expected – we were standing in one of a few dozen high profile stores, well-known for having excessive amounts of cash on hand (in the first week of sales, businesses generated $5 million in cash-only transactions) and no where to put it, because the banks won’t take it.

Clearly, denying these pot stores the ability to safely deposit their earnings poses an imminent threat to public safety.  These shops are easy targets for robbery and assault (as well as other forms of criminal activity), which puts customers and employees at serious risk.  Some of these shop owners are considering banning backpacks or other large bags – others are arming their workers.  Neither of these options are a viable solution.

This problem isn’t new however, nor is it going unnoticed.  On February 14th, the Department of Treasury released a nonbinding memorandum, in conjunction with the Justice Department stating that banks may consider working with pot retailers without fear of prosecution – so long as they remain in compliance with state laws, and followed other instructions outlined in the memo.  Though a truly historic and progressive action by the federal government’s leading financial regulatory body, these guidelines are largely symbolic, providing no actual legal protection to banks working with cannabis shops.   As such, most financial companies remain skeptical about getting involved with a market existing under so many contradictory laws.

According to federal law, these banks could technically be found guilty of money laundering (among other offenses) for handling the proceeds of what the US government still considers an illegal drug.  The Colorado Bankers Association rightly notes that the guidance issued by the Department of Justice and the U.S. Treasury “only reinforces and reiterates that banks can be prosecuted for providing accounts to marijuana related businesses.”  The Association further criticizes these new guidelines, stating that “Bankers had expected the guidance to relieve them of the threat of prosecution should they open accounts for marijuana businesses, but the guidance does not do that.  Instead, it reiterates reasons for prosecution and is simply a modified reporting system for banks to use. It imposes a heavy burden on them to know and control their customers’ activities, and those of their customers.”

Is it any surprise then that these guidelines – which include a multi-tiered labeling structure and a requirement for banks to maintain ‘suspicious activity reports’ – have left many financial institutions with cold feet?  Two of Colorado’s largest banks, Wells Fargo and FirstBank have already announced they won’t work with weed-related enterprises.  In fact, most financial trade associations have widely rejected these latest overtures because there are no tangible, legal policies in place.

Despite the skepticism held by many federal administration officials and other politicians, the government can and should be doing much more to enable the success of this new, legal market. Unfortunately, many are sitting on their hands, and holding their breath – hoping to quietly ride out this growing wave of support for legalization, which shows no sign of subsiding.  Over 50% of the US population supports a regulated marijuana retail system for adults.

Its time for these officials to concede to the will of the electorate, and address the legitimate needs of this new industry. Lawmakers now have an opportunity to show true leadership in this changing political landscape by supporting legislation that would give states and businesses the resources necessary to enable a responsible and successful implementation of this new “great experiment.” Specifically, they should get behind the “Marijuana Businesses Access to Banking Act,” introduced by Colorado representative Ed Perlmutter.  This bill (HR 2652), already endorsed by the Colorado Bankers Association, would alter various banking laws to protect banks providing services to marijuana-related businesses from the threat of federal prosecution and other penalties.

Financial institutions don’t operate off good-faith statements (including non-binding memorandums) – even those from the Department of Treasury, or any other enforcement agency.  They operate under explicit legal authorization.  Only when the laws change will the banks truly be free to provide the services these businesses so desperately need, and their communities rightly deserve.

 

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 Contact your representative today and tell them to support HR 2652

55 thoughts

  1. I’m saying not all cops are fanatic about arresting people for a non-crime.

    I don’t think we even disagree, it’s well-known that despite decriminalization, the arrests continue as usual

  2. We need to somehow block police unions from paying to continue the War on Marijuana. Even the police who support LEAP have to keep paying into a system than keeps promoting this garage as policy. The unions not there to keep crime on the streets, which is exactly what they are doing!!! The policy endangers the very police they claim to represent… Weird, huh?

  3. Holy shit!
    The Department of Health and Human Services just issued a paper to the FDA to allow research into the efficacy of medical marijuana!!!

  4. As a Veteran with suicidal idealism daily, severe PTSD, and chronic pain that this drug works. It sends to a place of normalcy where I can express myself with out anger in a humane way. With it I have time to repair my home from self destruction that alcohol has caused after coming back home from war. I’m no longer a drink, or smoke at all. I Vaporize to my hearts will which takes less time than drinking and during emergency anger/rage situations it acts within ten seconds. No drug that VA has given has ever worked or acted within the time that I need. Nor has anything worked in such a fast acting way. The only issue is the availability of treatment as I live in a state of a holes.

  5. “…block police unions from paying to continue the War on Marijuana.”

    I can’t agree, a War against Someone Else’s War only Worsens things more.

    Let’s apply SMOOTH SLOGAN: Forgive—> Convert—> Redeploy:

    A Jehovah’s Witness writer got it right (AWAKE, Jan 2014, p. 10):

    ” Peer pressure can make good people do bad things. “Bad associations spoil useful habits.”– 1 Corinthians 15:33. ”

    Maybe “bad associations” doesn’t mean the people you associate with are bad, rather that there is a Conflict-of-Interest in the system or “association” between taxes and government services they pay for.

    A police union helps the officer get what he deserves according to contract for the effort he puts in.

    (A) Every officer knows his chance to get promotions and secure high earnings career depends in large part on impressing his peers, other officers.

    (B) It also depends on impressing his peers in the family, including in-laws who are watching to see that he earns enough MONEY to “meet his responsibilities, support his dependents, deserve their daughter etc.”

    (C) It also depends on impressing those who PEER at him on the street, convincing them he is STRONG and untrickable, by scoring enough exemplary wins against alleged wise-offs.

    For decades everybody “knew” pot smokers were untrustworthy because the nicotine-bought media had told them so, creating an easy, “approved” target.

    Forgive—> Convert—> Redeploy. What can a trained diligent police officer do to replace the Crackdown on Potheads he previously earned money participating in?

    Most officers have CHARISMA and an ability to speak in response to a wide range of questions. Police officers are teachers, and their teaching ability can be used to eliminate malpractices by positively teaching SAFER alternatives– starting with the same observed “pot smoker” one previously would have arrested for “possession”.

    Example: H-ot B-urning O-verdose M-onoxide $igarette papers– mainly in tobacco use this one catastrophic format has killed 200,000,000 human beings sinc3e 1853.

    The attending (instead of arresting) officer asks if the interviewee has a VAPORIZER or a Long-Drawtube One-Hitter, and if they have none but are carrying cannabis, i.e. could be suspected of rolling joints instead of VAPING, then the officer does one or more of the following:

    (1) takes name and i.d. numbers etc. and writes a “citation” which is an invitation to a required education event in the next weeks where officers teach how to make, use, market Long-Drawtube One-Hitters;

    (2) hands out 9″ x 7″ booklet explaining how to use a Long-Drawtube One-Hitter;

    (3) officer gives non-light-up demonstration how to load, use, screenscratch a utensil;

    (4) officer issues (“sells”) One-Hit-Kit with new utensil and accessories inside;

    (5) “purchaser” receives bill from City later, high enough to pay officer salary and prisoner-manufacturing, low enough not to be punitive.

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