Matt PichtThe U.S. Department of the Treasury issued new guidelines Friday about how banks can legally interact with marijuana shops, which are still technically illegal in the eyes of the federal government.
Under the old rules, banks had to file Suspicious Activity Reports and cease doing business with any company suspected of peddling pot, or else face prosecution. (Via CNN)
The new regulations still require banks to report any transactions with pot shops, but it creates a new designation for legal marijuana businesses, allowing banks to work with those stores.
It's a welcome break for dispensaries, which have been legally selling medical marijuana in 20 states for years. In 2012 Colorado and Washington legalized recreational marijuana, and the Justice Department hasn't interfered with the booming pot business in both of those states. (Via Fox News)
But because banks are regulated on a federal level, they're still subject to the federal laws banning marijuana. Financial organizations have been leery about doing business with pot shops — and being shut out by the banks has lead to some severe problems for the industry.
"They don't get checking accounts or deposit accounts, they don't get lines of credit. You can't swipe your card when you're buying your marijuana, so they have to rely on cash only. And that's a problem because they're vulnerable to being robbed." (Via Al Jazeera)
"It's absolutely critical that these businesses can have bank accounts. It will help us in law enforcement, traceability, making sure that criminal cartels are not involved with the business, and make sure that people are paying their taxes and following the law." (Via Bloomberg)
Marijuana advocates welcomed the federal government's move Friday. The president of the D.C. based National Cannabis Industry Association called the new guidelines "a huge victory for our members, our communities, and the banks. ... Our businesses deserve to be treated like those in any other American industry."
But as a CNBC reporter notes, a simple roadmap won't be enough to convince the banks it's safe to interact with marijuana sellers.
"Most banks will still avoid knowingly handling cash from pot businesses — for one thing, they have other regulators. ... Bankers could face loads of issues with bank examination reports, cease and desist orders, and other regulators concerned about money launderers."
And the president of the Colorado Bankers Association told Politico the new regulations don't give bankers any reason to start accepting weed money. "We were hoping for at least a yellow light – but we think this is another red light. It does nothing to encourage our members to provide banking services to these businesses."
Friday's memo from the Treasury follows a similar declaration made by the Justice Department last year, which said the Department wouldn't prosecute marijuana sellers who followed state regulations.
