While the collaborative cluster fuck between the Obama Administration and the Treasury Department attempts to establish regulations that would allow banks to do business with the legal marijuana trade, proprietors of pot dispensaries have been forced into operating a “cash only” business, making storefront ATM’s a valuable asset.
However, Colorado law enforcement agencies have their panties in a wad over these on-site banking solutions, because they say many of these privately owned ATM’s -- ghost machines with no traceable ownership -- gives organized crime an outlet to facilitate their money laundering schemes.
While ATM’s owned by financial institutions are governed by federal law, privately owned machines are only controlled by the laws of the state. And that is only if the state deems it necessary to do so -- Colorado does not.
This administrative oversight has both state regulators and law enforcement officials chomping on a proverbial electric fence.
"That's not only a disaster waiting to happen; it's a disaster that will happen," said Jeff Sweetin with the U.S. Drug Enforcement Administration in Colorado. "It's almost an ideal way for the criminal element to operate. Any time you have an easy ability to move large amounts of cash into the system without checks and balances ... you're wide open."
State officials say the potential for these cash machines to be used in pot shop money laundering operations is very real, which should be even more of a reason for federal lawmakers to resolve the banking issues for the marijuana industry.
"Could ATMs be used to launder money? Conceivably, yes," said Carolyn Tyler, a representative for Colorado Attorney General John Suthers’ office. "But this is a public-policy matter for the legislature. It speaks to the overall need for the banking issues to be remedied at higher federal levels, and our state has been calling for that."
Although the banking industry is prohibited from getting into bed with any business dealing in marijuana, which technically make it against federal law to permit the use of ATM’s inside marijuana dispensaries, officials say that hasn’t stopped it from happening. However, this is not the fault of dispensary owners, as many report being shocked to learn that many ATM providers are not regulated by the state.
"I lost the ability to have credit cards in the store overnight," said Toni Fox, owner of the 3D Cannabis Center owner Toni Fox regarding last year’s decision by the credit card companies to not accept marijuana sales. "So I went to others in the industry who had ATMs. I asked who they used and went with that."
Banking insiders say that Colorado pot shops have the ability to launder money easily using in-store ATM’s, because the state does not dictate the separation of store ATM funds and revenue. What’s more is that most privately owned ATM providers allow businesses to use their machines provided the business agrees to service them – fill them with cash. Insiders say this creates an optimal environment for those wanting to clean any dirty money.
Officials say this practice is difficult to monitor because "the sponsoring bank may not know who actually owns the ATM ... and who operates the ATMs may remain virtually invisible."
Mike Adams writes for stoners and smut enthusiasts in High Times, Playboy’s The Smoking Jacket and Hustler Magazine. You can follow him on Twitter @adamssoup and on Facebook/mikeadams73.