Plenty of green, but legal marijuana businesses can’t take it to the bank
The legalization of marijuana is being called a “Green Rush,” with prospectors in the industry expected to make millions. But there’s a big problem: banks aren’t allowed to do business with them.
Marijuana remains illegal under federal law even though Washington and Colorado have legalized it. That means banks are prohibited from making loans, providing checking accounts, and other services to pot businesses without risking federal prosecution.
Marijuana dispensaries have been clamoring for changes for years, but a growing number of lawmakers and officials have recently joined the chorus in light of the Washington and Colorado votes.
An advisory group of industry, lawmakers, regulators and law enforcement are meeting Thursday for a “frank discussion” of the issue, a Treasury Department spokesman tells The Seattle Times.
The federal Bank Secrecy Act Advisory Group (BSAAG) meeting is the first since the Department of Justice announced in August a series of guidelines allowing Washington and Colorado to move forward with legal marijuana.
“We definitely think things will be changing, but it’s a little sketchy when there’s a big dollar sign over the top of your dispensary that says come rob me,” a Seattle dispensary owner who wishes to remain anonymous tells KIRO Radio at Night. “There are definitely some sleepless nights.”
The dispensary owner says it’s been a problem for several years since banks stopped allowing him to work with them. He says the timing is critical for the feds to craft new rules accommodating marijuana businesses before hundreds open legally next year.
A number of lawmakers have been pushing for changes, including U.S. Rep. Denny Heck, D-WA. Heck has proposed new legislation with a Colorado colleague that would protect banks from federal prosecution and allow marijuana businesses to make deposits, apply for loans, and accept credit cards.
“As a small business owner, I can’t imagine trying to operate a legitimate business without access to the banking system,” says Heck. “Forcing legitimate businesses to operate on a cash-only basis without bank accounts is an invitation for robbery, tax evasion and organized crime. With twenty-one states and D.C. now allowing for some form of legal adult marijuana usage, federal law needs to be updated to reflect the reality of the situation in the states.”
Despite the proposed legislation, it’s likely rules or laws won’t be changed in time for the granting of licenses and opening of marijuana businesses in Washington state early next year.
Whatever the banking group discusses Thursday, the public won’t know. The group meets in private and it’s not subject to the Freedom of Information Act.
Experts say the banking group has little incentive to act as long as federal law prohibits marijuana. And with pot still illegal in so many states, few lawmakers have much incentive to support new legislation.
The dispensary owner tells KIRO Radio he’s applied for a license to become legal under I-502, and is increasingly worried about how to manage the business and regulations if granted a license on a cash-only basis as he has for the last several years.