Hesitant Banks Could Soon Open To Marijuana Industry
The “Cash Only” signs that are ubiquitous in Colorado’s marijuana businesses, medicinal or recreational, could soon be on the way out. Attorney General Eric Holder says the U.S. Department of Justice will soon issue guidelines meant to put skittish financial institutions at ease about dealing in the burgeoning marijuana industry.
Largely excluded from banking until this point, the marijuana industry has been unable to open accounts or secure capital. That’s led many to deal in cash, making it tougher for state regulators to follow a paper trail.
Holder made his comments at a University of Virginia event, Politico reported:
"We’re in the process now of working with our colleagues at the Treasury Department to come up with regulations that will deal with this issue," Holder said. He added that the new rules were likely to emerge "very soon" and were not intended to amount to a blessing of marijuana by the federal government. "It is an attempt to deal with a reality that exists in these states," he said.
Members of Colorado’s congressional delegation have been lobbying Holder and the Department of the Treasury since the state began allowing recreational marijuana sales. Democratic Senators Mark Udall and Michael Bennet penned a letter, along with House members Diana DeGette (D-Denver), Jared Polis (D-Boulder), Ed Perlmutter (D-Golden), and Mike Coffman (R-Aurora), earlier in January asked for banking guidelines.
Rep. Polis took the lobbying even further, offering to take President Obama on a tour of Colorado’s pot industry.
Governor John Hickenlooper’s welcomed the news too. Through a spokesman, Hickenlooper hoped the eventual direction from the federal government is specific and thorough.
Without guidelines though, banks are unlikely to open up completely. That leaves state regulators in a bind. It’s more labor intensive to audit a marijuana store that deals in cash. Until guidelines are made public, Colorado’s Division of Marijuana Enforcement director Lewis Koski says his investigators will have a tough time holding business owners accountable.
“From a regulatory standpoint, the more transparent a business can be, the easier it is to regulate them,” Koski said.
There’s no time frame for the guidelines to be published.