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Obama Administration Tells Banks How to Do Business with Legal Marijuana Dealers
The Obama administration said on Friday that it has advised U.S. attorneys in states, where marijuana is legalized, not to prosecute banks and financial institutions that allow legal marijuana stores to open accounts and accept credit card payments. Right now, the kindness is only for Colorado and Washington, where recreational marijuana has been legalized by popular support.
This is a good sign, though doubts remain, as previously the Obama administration had told U.S. attorneys not to prosecute legal marijuana businesses in states where it is legal. But federal raids continued and continue, and in places like California, federal authorities are threatening landlords, rather than the shops themselves, for housing businesses that deal in a substance still contraband under federal rules.
However, the step taken this time is a bit stronger than the Obama administration’s previous assurances, and the promises were backed by issuance of new rules by the Treasury Department that lays down the path for banks to bring marijuana commerce into the financial mainstream.
While Democratic Rep. Denny Heck of Washington State welcomed the step and commented, “Legitimate marijuana businesses will no longer be forced to operate as cash-only businesses,” others differed.
Sen. Chuck Grassley (R-Iowa) said, “Marijuana trafficking is illegal under federal law, and it’s illegal for banks to deal with marijuana sale proceeds under federal law. Only Congress can change these laws. The administration can’t change the law with a memo.”
Frank Keating, president and chief executive of the American Bankers Association said, “This guidance doesn’t alter the underlying challenge for the banks … Possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.”
Accepting deposits from marijuana businesses remains a violation of money-laundering laws and only the Congress can remedy the situation. Marijuana is still classified in the same category as LSD and Heroin, though few know why.
Update: The title has been rewritten following reader suggestionsObama Administration Tells Banks How to Do Business with Legal Marijuana Dealers by Scott