When the Obama administration provided the U.S. banking industry with a set of guidelines for conducting business with legal marijuana dispensary owners, it wasn’t exactly accepted with jubilation. While the prospect of working with a multimillion dollar growth industry would seem like a good thing, there are a number of factors that make it less than appealing to many banks. Marijuana has of course been legalized for use in several states, and many more are expected to follow suit. This has given rise to a tremendously lucrative business opportunity, but as it turns out, legal dispensary owners have their hands tied with regard to where they can deposit their money.
The biggest stumbling block to the entire banking issue is the fact marijuana remains a controlled substance under federal law. One is tempted to wonder therefore why the federal government has seen fit to release these guidelines, while all business activity involving the sale of marijuana remains illegal.
Some see the decision of the federal government as a step toward increased clarity and reduced ambiguity with regard to marijuana laws. With federal governments and marijuana-legal states differing in regard to the legal status of marijuana, there has always been a potential for confusion, with serious legal consequences. With the federal government stepping up and providing the banking industry with a definitive guide to dealing with the marijuana business, it would seem from certain perspectives that the battle lines have been moved just a bit further.
Others don’t necessarily see it that way. A set of guidelines is one thing; but a definitive statement with regard to the legality of dealing with marijuana companies it isn’t. Washington Bankers Association president Jim Pishue cautions that the guidelines do not negate federal law, under which marijuana is still illegal. This means that any business that enters into official dealings with marijuana dispensaries can be deemed to be involved in illegal activity.
The Colorado Banker’s Association is another organization that warns of the risks of adhering to the guidelines without regard for federal law. Association president Jenifer Waller said that the guidelines do not change the legal status of marijuana according to federal law. She also said that the government remains cognizant of the risks entailed by banks when dealing with the marijuana industry, and that there remains a possibility of being sanctioned and/or prosecuted in court.
Many banks are actually eager to do business with legal dispensaries, particularly in Colorado where the industry is currently reaching peak profit levels. But the set of guidelines released by the federal government has done little to convince them to take the next step into actually servicing these banks. For many in the banking industry, it will take more than a list of guidelines to allay fears of criminal prosecution. With the filing of the Marijuana Business Access to Banking Act, bankers who wish to deal with firms in the legal marijuana industry may finally have all the encouragement that they need, secure in the knowledge that they would be free from criminal prosecution.