Wednesday, September 11, 2013

Feds Look to Legalize Marijuana Industry Banking



Washington's banks and financial institutions are still hopeful that they will be able to do business with legalized marijuana businesses without fear of prosecution. Deputy Attorney General James Cole told Congress that banks and financial institutions have been afraid to let marijuana-related businesses open accounts for fear of criminal prosecution.

This has been an ongoing problem since 1996 when California voters made it legal to use medical marijuana. Federally insured banks and other financial institutions were at risk for being prosecuted for drug racketeering, and thus refused to do business with medical marijuana dispensaries.

Since the Justice Department first announced its more permissive marijuana enforcement policy, marijuana advocates have been quick to point to banking issues as a roadblock to success. Legitimate marijuana businesses that operate on a cash-only basis are open to criminal activity, such as tax evasion, money laundering, and theft. It also presents a public safety concern because cash-only businesses could result in the presence of firearms and other weapons.

In addition to banking issues, the Justice Department is still trying to figure out how they will protect states where marijuana is still illegal from being infiltrated with legal marijuana from neighboring states. DEA chiefs are certain that "when marijuana will be fully legal to buy, diversion of the drug will explode". 

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