Feds Seek To Legalize Marijuana Industry Banking
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Feds Seek To Legalize Marijuana Industry Banking
Posted by CN Staff on September 10, 2013 at 14:19:31 PT
By Pete Yost, Associated Press
Source: Associated Press
Washington, D.C. -- The Justice Department and federal banking regulators will help clear the way for financial institutions to transact business with the legitimate marijuana industry without fear of prosecution, Deputy Attorney General James Cole told Congress on Tuesday.The issue has taken on greater urgency now that Colorado and Washington have become the first states to legalize recreational use of marijuana. Currently, processing money from marijuana sales puts federally insured banks at risk of drug racketeering charges.
Because of the threat of criminal prosecution, financial institutions often refuse to let marijuana-related businesses open accounts. The problem occurs in states that have laws permitting medical use of marijuana. In 1996, California voters made their state the first to allow medical use, and 19 more states and the District of Columbia have enacted similar laws.In an appearance before the Senate Judiciary Committee, Cole said the absence of banking services is one that "we need to deal with" and that "we're working on it."The congressional hearing was the first since the administration announced a new, more permissive enforcement policy. On Aug. 29, the Justice Department said it won't try to stop Colorado and Washington state from legalizing recreational marijuana use as long as they implement strong enforcement systems. Marijuana is an illegal drug under federal law.At the hearing that highlighted the conflict between state and federal law on marijuana, Cole told the committee that "there are no perfect solutions here. ... We're at the point we're trying to find the best of the imperfect solutions before us."Committee Chairman Patrick Leahy, D-Vt., said that as a result of the banking constraints, legitimate marijuana businesses are operating on a cash-only basis and "that's a prescription for problems, tax evasion" and other criminal activity. Cole agreed and said there is a public safety component to the problem because the cash-only business can result in the presence of guns.In 2011, American Express announced it would no longer handle medical marijuana-related transactions because of fear of federal prosecution. A month later, Cole gave banks an explicit directive on medical marijuana that stated: "Those who engage in transactions involving the proceeds of such activity may also be in violation of federal money laundering statutes and other federal financing laws."Leahy, who spent eight years as a prosecutor early in his career, said the Justice Department should focus on prosecuting violent crime and should respect the votes in Colorado and Washington to legalize small amounts of marijuana for personal and medical use.Iowa Sen. Chuck Grassley, the committee's top Republican and co-chairman of the Senate Caucus on International Narcotics Control, said the Justice Department is "giving the green light" to an industry bent on breaking federal law.Grassley said that Colorado has seen a sharp uptick in diversion of marijuana from Colorado to other states and increased use among minors."I understand the skepticism that you come to it with," Cole told Grassley. "We have reserved, quite explicitly, the right to go in" and challenge the regulatory programs of Colorado and Washington.With the door to legalization open in two states, others could follow.The 20,000-member Marijuana Policy Project says it will support efforts to end marijuana prohibition in 10 more states by 2017.In a harshly worded letter to Holder this week, nine former Drug Enforcement Administration chiefs predicted that "when marijuana will be fully legal to buy, diversion of the drug will explode."Source: Associated Press (Wire)Author: Pete Yost, Associated Press Published:  September 10, 2013Copyright: 2013 The Associated PressCannabisNews  -- Cannabis Archives 
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Comment #4 posted by John Tyler on September 10, 2013 at 19:30:45 PT
Come on legalization
"When marijuana will be fully legal to buy, diversion of the drug will explode." The prohibitionists still don’t get it. They are still thinking of it being wrong or naughty or something. What kind of twisted minds are these? It will be legal. There will be no such thing as “diversion.” It will be on the legal market. People can use it, or not use it. It won’t be a big deal. They are on the wrong side of this issue. I wish they would just get over it.
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Comment #3 posted by disvet13 on September 10, 2013 at 16:31:17 PT:
complete legalization
an explosion of completely legal cannabis. poor old bureaucrats without a job. i can hear anslinger and rockefeller crying in their graves. this will be a major victory, the snowball is rolling downhill.
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Comment #2 posted by mexweed on September 10, 2013 at 16:17:26 PT:
A Little Diversion, Please
So "diversion" is the new buzz word-- well, if prosecution of small-quantity users is not a priority, how about accepting a little leeway for SMALL-QUANTITY "diversion"-- including to minors for education purposes (promote 25-mg-serving-size vape literacy, rather than H-ot B-urning O-verdose M-onoxide "joint smoking" format causing stoner symptoms blamed on the cannabis and luring children into nicotine $igarette addiction)? 
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Comment #1 posted by HempWorld on September 10, 2013 at 15:27:25 PT
Great News!
Oh yeah and:"when marijuana will be fully legal to buy, diversion of the drug will explode."Yeah, right just as happens now with alcohol, not...
Marijuana Cafe
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