While the state Liquor Control Board has crafted excellent ground-breaking rules for the growing, distributing and selling of marijuana and the federal Department of Justice has announced a hands-off approach, the newly legal industry still faces one critical impediment: access to financial services.
Federal banking regulators should act quickly to remove this obstacle.
Because marijuana remains illegal under federal law, financial institutions are likely to refuse marijuana business accounts. They could face regulatory sanctions as well as criminal prosecution for “aiding and abetting” a federal crime and committing money laundering.
It’s easy to see why bankers wouldn’t want to deal with these businesses.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
But without the ability to take credit card payments and open checking accounts, the state’s licensed marijuana businesses will have to operate on a cash-only business. And a marijuana industry running on piles of cash invites all kinds of unwanted problems.
A cash-only industry unnecessarily introduces personal safety issues into an otherwise well-run system. Gangs and thieves will see small marijuana business as easy prey, putting individuals at risk of violent crimes.
Less dangerous, but equally problematic, is how marijuana businesses will make tax payments to the state or local jurisdictions. Solving the banking problem could influence South Sound cities and Thurston County – slated for a potential 11 retail pot stores – which might be considering restrictions beyond the state’s rules.
Most of these problems go away if Congress passes a measure co-sponsored by Rep. Denny Heck, D-Olympia. It would allow federally regulated financial institutions to service the state’s sanctioned growers, processors and retailers.
But getting any bill through Congress these days is a challenge, and timing is important with stores set to open next year. So Heck and co-sponsor U.S. Rep. Ed Perlmutter, D-Colorado, are urging different federal agencies to adopt an attitude similar to the Department of Justice.
The congressmen want federal banking regulators to issue a memorandum saying they too, will take a hands-off approach to enforcing current federal law. They say the DOJ has set a federal precedent, and suggest other agencies can and should follow suit.
This is a creative strategy that might succeed, although getting seven federal bureaucracies to coalesce around a single set of guidelines affecting a broad spectrum of regulated entities seems like a gigantic task.
Kudos to Heck and Perlmutter for continuing to search for a resolution to this important problem. If they can do it, they’ll establish themselves as influential leaders in the nationwide movement toward ending marijuana prohibition.