On Wednesday, Washington Governor Jay Inslee (D) and Colorado Governor John W. Hickenlooper (D) sent a signed letter to key government officials – including the secretary of the treasury and the chairman of the board of governors of the federal reserve – requesting the feds change banking regulations to permit transactions between financial institutions and legalized retail marijuana businesses.
Referencing the August 29 Department of Justice memo that instructed federal prosecutors to back off legal marijuana companies, the governors wrote: “Access to the banking system by these state-licensed businesses is a necessary component in ensuring a highly regulated marijuana system that will accurately track funds, prevent criminal involvement, and promote public safety.
“In order to achieve the mutual federal and state goal of establishing tightly-controlled marijuana regulatory systems, we urge you to issue inter-agency guidance that will allow legal, licensed marijuana businesses access to the banking system.”
Specifically, Inslee and Hickenlooper are asking officials to ensure that federal law enforcement institutions such as the Dept of Justice as well as the Internal Revenue Service permit financial services companies and legitimate cannabis businesses to conduct transactions without fear of prosecution and federal seizure of funds.
Until the pot/biz banking conundrum is resolved, legal cannabis retailers will be forced to use cash for transactions, prompting Governors Inslee and Hickenlooper to express an obvious truth:
“Absent a means to properly account for the significant amounts of cash generated by licensed marijuana producers, processors and retailers, our… interest in promoting public safety and preventing diversion of marijuana and criminal activity will be exceedingly difficult.” A cash-only cannabis industry would “create an unnecessary inviting target for criminal activity.”
Additionally, the governors offered the feds a workable solution: "Our state regulatory agencies are committed to working with you in devising a system – also within the framework of existing (Anti-Money Laundering) laws – which will permit state marijuana licensees to bank revenues and use normal banking relationships to pay taxes and transfer funds to creditors (e.g. landlords, utilities providers, and others in the supply chain), just like any other small business."