US government issues 'cannabis cash' guidelines to banks
Obama administration has issued guidelines to banks concerned about dealing with business that legally sell marijuana
The US government is offering guidance to banks looking to accept deposits from places selling cannabis, to help them lower their risk of prosecution.
The Obama administration on Friday issued new law-enforcement guidelines aimed at encouraging banks to start doing business with state-licensed marijuana suppliers, like those in Colorado, even though such enterprises remain illegal under federal law.
Dealers currently sell marijuana entirely in cash transactions, making robbery and money laundering an increasing risk.
Colorado voted to legalise cannabis in 2012 and on so-called ‘Green Wednesday’, 24 stores, including thirteen former medicinal marijuana dispensaries, were able to sell the formerly illegal drug to customers interested in its recreational properties.
Washington State is expected to follow Colorado's lead later this year.
But many shops were unable to gain access to banking services and have been forced to operate on a cash-only basis, without access to financial services or credit.
Proprietors of state-permitted marijuana distributors in Colorado and elsewhere have complained of having to purchase inventory, pay employees and conduct sales entirely in cash, requiring elaborate and expensive security measures and putting them at risk of robbery.
The new guidance from the justice department and the Financial Crimes Enforcement Network (FinCEN) stops short of promising immunity for banks.
But it said criminal prosecution for money laundering and other crimes is unlikely if banks meet a series of conditions, such as avoiding business with marijuana operations that sell to minors or engage in illegal drug trafficking.
However, if banks turn a blind eye to illegal activity by failing, for example, "to conduct appropriate due diligence of the customers' activities, such prosecution might be appropriate," Deputy Attorney General James Cole warned in the memorandum.
The American Bankers Association expressed concern the guidance does not go far enough to protect banks.
Rob Rowe, a lawyer for the trade group said: "Compliance by a bank will still require extensive resources to monitor any of these businesses, and it's unlikely the benefits would exceed the costs."
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