OK. So, maybe Dazed and Confused isn’t the pot classic that Up in Smoke is, but the cult coming-of-age film set in the ’70s featured enough grass to rank as Rolling Stone’s No. 2 “Stoner Movie of All Time.” More important, Dazed and Confused seems to perfectly capture the reaction to Friday’s announcement from the Justice and Treasury Departments aimed at addressing the biggest challenge facing the almost-legal marijuana industry today — lack of access to banks.
Banks have refused to do business with marijuana dispensaries operating within the bounds of state laws for fear of being prosecuted themselves. Federal law classifies marijuana as a Schedule 1 drug on par with heroin, which means a bank doing business with a marijuana shop can be accused of money laundering and racketeering. This has left dispensaries in the 20 states and Washington, D.C., that allow marijuana distribution in a challenging position; they can’t let their bankers know how they make money…
Friday’s moves by the Justice and Treasury Departments gave many hope that the Feds were making significant changes to address this banking problem. Instead, the memos show that the industry is still dealing with a basic issue: Despite all the changes to state laws, popular support and President Obama’s recent remark that he considers marijuana no more dangerous than alcohol, marijuana is still 100% illegal under federal law. So, it’s no wonder you might be dazed and confused listening to the reactions that followed the release of the memos…
The Colorado Bankers Association calls this guidance a red light for banks, stating, “At best, this amounts to ‘serve these customers at your own risk,’ and it emphasizes all of the risks…Where does this leave the fledgling multi-billion dollar industry? Very much where it’s been.
Although marijuana entrepreneurs are increasingly comfortable starting businesses under permissive state laws and a federal “look the other way” policy, the federally regulated banking system needs certainty…
Trish Regan ends the piece by trivializing it all as election year politics. As cynical as I am, I don’t share the politics of many of those at Bloomberg. I’d like to presume that Obama and Holder went to the trouble of calling for opening service to the pot trade to save folks a lot of hassles. That brings in as many or more votes than a John Boehner tap dance.
She and Matt Miller got into a heated discussion on camera over the piece and though they both wasted time trying to talk over each other, I think she made the most sense. Fact is – and I’ve checked with my personal community banker, again – your community bank isn’t anymore likely than a chain store bank to open an account for a pot dealer who’s obeying all the local laws until and unless they receive assurances that would satisfy the most anal regulator.