Holder: Marijuana Businesses Need Access to Banking
At a Denver city council meeting at the beginning of January, Councilman Charlie Brown made a direct appeal to lawmakers in Washington, D.C. ”Please,” he said, “please grow up and let this business be a business and have a normal banking relationship like any other business.”
Brown was talking, of course, about the recreational marijuana business, which effectively became legal at the state level in Colorado on January 1. The National Cannabis Industry Association reports that $5 million in sales were recorded in the first five days of business, and tens of millions of dollars in sales are expected over the course of the year, but federal law prevents banks and credit card companies from processing financial transactions related to the production or sale of weed. This has created an environment in which pot shops are dealing almost primarily in cash, and this is a big problem for two reasons.
First, operating an all-cash business is a logistical nightmare; second, as U.S. Attorney General Eric Holder put it: “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.” Holder, it appears, was listening when Brown made his appeal in Denver.
Holder was speaking at the University of Virginia’s Miller Center on January 23. “You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” he said, referring to marijuana businesses in states where recreational use of the drug has been legalized. Holder alluded to legal guidance issued by the Department of Justice aimed at relaxing the money laundering and other regulations that currently make it impossible — or incredibly risky, at least — for banks to accept marijuana businesses as clients.