Yesterday Attorney General Eric Holder
said the Obama administration will offer guidance “very soon”
to banks that are leery of dealing with state-licensed marijuana
businesses because they worry about attracting unwelcome attention
from federal regulators and prosecutors. Because marijuana is still
prohibited by federal law, simply accepting deposits from
cannabusinesses could be viewed as money laundering or aiding and
abetting drug trafficking. That risk has made it difficult
for state-legal marijuana suppliers to arrange banking services, so
they often deal exclusively in cash, which makes their businesses
vulnerable to theft and hard for the government to monitor.
“You don’t want just huge amounts of cash in these places,”
Holder said during an appearance at the University of Virginia.
“They want to be able to use the banking system. There’s a
public safety component to this. 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.”
Brian Smith, spokesman for the Washington State Liquor Control
Board, which will regulate the marijuana stores that are expected
to start opening in that state this summer, agrees that all that
cash is “a problem for everyone involved.” The “smoothest way” to
deal with it, he says, would be legislation passed by Congress, but
he rates the chances of that happening as “slim to none.” He hopes
a policy statement from the administration will avoid the prospect
of marijuana retailers delivering their taxes in armored
trucks.
During testimony before the Senate Judiciary Committee in
September, Deputy Attorney General James Cole
said Justice and Treasury Department officials were conferring
about how to address the marijuana banking problem. Yesterday
Holder reiterated that “we’re in the process now of working with
our colleagues at the Treasury Department to come up with
regulations that will deal with this issue.” It is not clear how
those regulations will work or how, in the absence of new federal
legislation, the Justice Department can assure banks that they
won’t be prosecuted for serving businesses that federal law
classifies as criminal enterprises. “The rules are not expected to
give banks a green light to accept deposits and provide other
services,” The New York Times
reports, “but would tell prosecutors not to prioritize cases
involving legal marijuana businesses that use banks.”
That is similar to the
approach the administration has said it will take with
cannabusinesses that comply with state law in Washington, Colorado,
and the 18 states that allow medical but not recreational use. The
policy, described in an August 29
memo from Cole, makes no promises, leaves
a lot of leeway for federal intervention, and can change at any
moment. Will the yellow light that reassured plucky marijuana
entrepreneurs make banks comfortable enough to welcome the business
of federal felons?
“We’ll see something like the August 29 memo but from [Treasury
Secretary] Jack Lew and and Holder,” says Alison Holcomb, the ACLU
lawyer who ran Washington’s legalization campaign. “They may
include specific steps [indicating] what [they’ll] do if [they]
think there’s a problem to give banks that extra assurance. Sort of
like the DEA letters to [dispensary] landlords: We’re going to fire
a shot over your bow before we do anything. They may have to go
that far to reassure larger banks. But Bank of America has already
agreed that it’s going to hold the marijuana excise tax fund here
in Washington. That’s a step removed, but it’s still marijuana
activity. I think the banks are ready, or at least a sufficient
number [are ready], to provide services. We just need some piece of
paper that they can point to.”
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