In a bit of news sure to be welcomed by the marijuana industry – and hopefully, millions of Americans – a small group of banks have begun working with cannabis growers and providers.
About 105 different banks and other financial institutions have reported that they’ve worked with marijuana businesspeople in recent weeks. The banks are spread out over about a third of the United States.
Banks face a special dilemma when working with pot. Marijuana is still entirely illegal under federal law, and bankers who help marijuana businesses break that law in the course of their duty could themselves face criminal charges.
As the Obama administration began to ease up on longstanding anti-weed policy last year, a deputy to Attorney General Eric Holder released a memo saying the administration wouldn’t try to interfere with weed that’s legal at the state level – as long as those states carry out key federal law enforcement priorities, such as limiting gun violence.
Then, earlier this year, the Department of Justice issued a new set of guidelines that purport to help bankers work on cannabis accounts without breaking federal law – or at least without drawing the ire of the federal government.
At first, most bankers said they wanted nothing to do with the new guidelines, fearing they would still be exposed to criminal charges. Now, however, that appears to be changing.
“From our perspective, the guidance is having the intended effect,” said Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network. “It is facilitating access to financial services, while ensuring that this activity is transparent and the funds are going into regulated financial institutions responsible for implementing appropriate [anti-money laundering] safeguards.”
Still, the marijuana industry remains in a dangerous quandary. Only a few banks are open to weed so far, and that means most providers are still stashing, transporting, and using huge amounts of cash.
This is then a recipe for robbery, a crime that plagues some aspects of the industry – even though Colorado statistics show pot shops don’t drive up crime rates in the places where they locate.
The skepticism in the banking community is understandable. No one should ever have to go to jail solely for the “crimes” of other people. Even if marijuana is legal at the state level, bankers refuse to expose themselves to unnecessary risk. And that’s a big part of what bankers do everywhere, everyday.
Banks must now file “suspicious activity reports” whenever they work with stoner clients or their money. Bankers filed more than 1,000 of these notices between Feb. 14 and Aug. 8. Most of those reports show the weed-related transactions comply with all state law and the DOJ guidelines, Shasky Calvery said.