Medical Marijuana Causes Banking Headache
Banks fear federal charges of drug racketeering and money laundering if they allow dispensaries to deposit earnings.
Despite being legal in 17 states, medical marijuana is still illegal at a federal level, leaving dispensaries without a bank to deposit their earnings into. Some Colorado lawmakers are now seeking to change that by proposing a bill to found the Medical Marijuana Financial Cooperative, which seeks to provide banking services to the currently cash-only industry. Banks fear that if they provide financial services or support to growers, they may face charges of drug racketeering or money laundering. "Those who engage in transactions involving the proceeds of such activity may also be in violation of federal money laundering statutes and other federal financing laws," says US Deputy Attorney General James M. Cole in a memo—scaring away the last few small banks still willing to work with medical marijuana providers. Without banks, growers are left with huge piles of cash and huge piles of pot, making them and their cash-carrying customers ripe targets for robbery. "They've got bags of pot, bags of cash. It's a bad combination," says Democratic Sen. Pat Steadman of Denver, one of the bill's sponsors. Though Steadman believes there's practically no hope for the initiative a present, he feels a start must be made in trying to protect the cash-rich industry.