Business Week Magazine (which has been doing a really good job of late in covering the cannabis industry), in an article, entitled, Legal Pot Businesses Get One Step Closer to Bank Accounts, wrote today of how the federal government appears to be easing its restrictions against cannabis banking.
The article starts out by nicely defining the problem legal pot businesses are facing on the banking front:
As things stand now banks won’t take pot businesses as customers because marijuana is still illegal under federal law, but as Colorado and Washington open up their legal markets for recreational pot and other states allow more medical usage, that cash-only existence is becoming untenable. The problem has proven intractable enough that a state lawmaker in Washington wants to start a state-run bank for pot businesses so they don’t need to depend on cash.
It then notes how in a recent speech, Attorney General Eric Holder said the Justice Department “will soon provide official guidance to allow marijuana banking.” The New York Times does not think the new “rules” will “give banks a green light to accept deposits and provide other service” to legalized marijuana businesses, but it “would tell prosecutors not to prioritize cases involving legal marijuana businesses that use banks.” Business Week says this “thread-the-needle approach echoes what the Justice Department said about criminal prosecutions” in the Cole Memo.
Yes, but. The Cole Memo (named after Deputy Attorney General James Cole) said that the Justice Department generally will not bring cases against marijuana businesses or users operating legally under state laws. That’s all good, but we worry that will not be enough for banks.
The cannabis banking issue is obviously critical for recreational marijuana businesses in Washington and Colorado, but it is of equal importance to medical cannabis businesses in other states as well. We expect Washington and Colorado banks to take the lead on this, if any lead is to be taken, and if and when they do, we will report back to you.