Members of the banking industry are nervous about lending money to marijuana businesses for fear of being tarred-and-feather by Uncle Sam before facing charges for money laundering, but they may soon have less to worry about.
As of right now, the majority of banks across the country have found themselves in a position to refuse doing business with the legalized marijuana community because cannabis is still considered illegal in the eyes of the federal government. Therefore, most financial institutions have shied away from the budding bed of marijuana commerce rather than risk prosecution for failure to comply with federal law.
However, the U.S. Treasury Department recently announced that they would head to the negotiation table with the banking industry in an attempt to formulate some type of reasonable compromise regarding what members of the Treasury Department are calling a "complicated issue."
Rob Rowe, an attorney for the American Bankers Association, says the only reason the issue is complicated is because marijuana is still illegal in the United States. “The industry certainly appreciates any additional guidance on the ability to bank marijuana dispensaries in states where use is legal, it really doesn’t change the fundamental prohibition.”
Other members of the banking trade agree, saying that even if the government shows the industry some flexibility, their efforts will still only have “limited value” as long as federal law remains unchanged.
“We have several members who would be very anxious to bank the marijuana industry, but have been told they cannot,” said Jenifer Waller, senior vice president of the Colorado Bankers Association. “You really have to rely on what the law says.”
Currently, federal law dictates that any bank suspecting a transaction is in violation of state or federal law is responsible for reporting it to authorities. Unfortunately, that means that banks knowingly doing business with legitimate dispensaries are at risk for bringing the heat down from the Justice Department.
A meeting is scheduled next month to determine if the Treasury office needs to step in and help guide the Justice Department’s position on this matter. Regardless of the outcome, the consensus of the banking industry appears relatively cut and dry: as long as marijuana is against federal law, they will not be servicing the marijuana industry.