Releaf Magazine
23Dec/130

Marijuana Businesses May Get Good Banking News In Early 2014

by Matt Ferner
marijuana banking
Marijuana businesses may not yet get a full green light on the banking rights that non-marijuana businesses already enjoy, but they are likely to get a "yellow light" as soon as the new year, Jack Finlaw, Colorado Gov. John Hickenlooper's (D) chief legal counsel, said on a joint call Thursday.

"What we're being told," Finlaw said on the call hosted by Drug Policy Alliance, "is probably in the first quarter of 2014 there will be some guidance issued that's comparable to the Cole memo from the Department of Justice that will give, maybe not a green light, but a yellow light to banks to allow them to do business [with marijuana businesses] -- to take deposits, to set up checking accounts, to set up small business loans, to allow these businesses to accept purchases through debit cards or credit cards, to allow what normal businesses are allowed to do."

Last week, the Bank Secrecy Advisory Group had a closed-door meeting in Washington, D.C., to begin talks about reforming banking regulations so that banks can legally engage in services with marijuana businesses.

Currently marijuana businesses aren't allowed to set up legal bank accounts because the federal government still considers marijuana to be illegal. Worried banks fear that they could be implicated as money launderers if they offered traditional banking services to the pot businesses.

"It's my understanding that the ball is in the court of the Department of Treasury," Finlaw added. "The Department of Justice having issued the Cole memo and having signaled to Treasury that they would be willing to see some accommodation in the banking regulations, is working with FinCEN in Treasury."

FinCEN is a bureau of the U.S. Department of Treasury that analyzes financial data to mitigate against illicit use and money laundering.

Even if the DOJ and Treasury give the "yellow light" to banks, there would also continue to be some oversight by the banks to ensure that the marijuana businesses they work with are not a front for illegal activity, Finlaw said.

Thursday's news follows a DOJ announcement in August that it is "actively considering" how to regulate interactions between banks and marijuana shops that operate within state laws and don't violate other federal law enforcement priorities.

Although official regulations have not been set, for now, financial institutions and other enterprises that do business with marijuana shops that are in compliance with state laws are unlikely to be prosecuted for money laundering or other federal crimes that could be brought under existing federal drug laws, as long as those pot businesses don't otherwise violate the DOJ's enforcement priorities, a senior Department of Justice official said.

"My understanding is there is a discussion in Washington about how much of this can be accomplished administratively through FinCEN, Treasury and Justice, and how much Congress needs to do something," said Ethan Nadelmann, executive director of Drug Policy Alliance, on Thursday's joint call. "It may be the reason for putting out a yellow light instead of a green light, [it] may have to do with some constraints in federal law and the administrative agencies trying to figure out how far they can accommodate these legitimate needs for access to legal banking while staying within the constraints of federal law."

Finlaw also noted that no one in Washington had given timing on the release of a marijuana business banking memo, but that the first quarter was the hope and expectation based on how the process has been working thus far and how long it took for the DOJ's Cole memo to be released.

"The hope is that we can get this resolved in early 2014," Finlaw said.

Dan Riffle, director of federal policies at Marijuana Policy Project, told The Huffington Post that the hope is that the banking issue is resolved before recreational marijuana retail shops open in Washington in Colorado in 2014.

"This raises obvious safety concerns and tax compliance issues, and one of the primary reasons Colorado and Washington voters approved initiatives to regulate marijuana was to reduce the risk of violence and ensure sales of marijuana are taxed appropriately," Riffle said. "It's imperative that Treasury, FinCEN, and the DOJ work together to resolve this issue as soon as possible in order to honor the will of voters in those states."

Messages to DOT and DOJ regarding the possibility of a first-quarter announcement were not immediately returned.

Colorado's first recreational marijuana shops are expected to open on Jan. 1, 2014, with Washington state's opening later in the new year.

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Via www.huffingtonpost.com

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18Nov/130

Eric Holder Says DOJ Will Let Washington, Colorado Marijuana Laws Go Into Effect


WASHINGTON -- The United States government took a historic step back from its long-running drug war on Thursday, when Attorney General Eric Holder informed the governors of Washington and Colorado that the Department of Justice would allow the states to create a regime that would regulate and implement the ballot initiatives that legalized the use of marijuana for adults.

A Justice Department official said that Holder told the governors in a joint phone call early Thursday afternoon that the department would take a "trust but verify approach" to the state laws. DOJ is reserving its right to file a preemption lawsuit at a later date, since the states' regulation of marijuana is illegal under the Controlled Substances Act.

Deputy Attorney General James Cole also issued a three-and-a-half page memo to U.S. attorneys across the country. "The Department's guidance in this memorandum rests on its expectation that states and local governments that have enacted laws authorizing marijuana-related conduct will implement strong and effective regulatory and enforcement systems that will address the threat those state laws could pose to public safety, public health and other law enforcement interests," it reads. "A system adequate to that task must not only contain robust controls and procedures on paper; it must also be effective in practice."

The memo also outlines eight priorities for federal prosecutors enforcing marijuana laws. According to the guidance, DOJ will still prosecute individuals or entities to prevent:

  • the distribution of marijuana to minors;
  • revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels;
  • the diversion of marijuana from states where it is legal under state law in some form to other states;
  • state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
  • violence and the use of firearms in the cultivation and distribution of marijuana
  • drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
  • growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands;
  • preventing marijuana possession or use on federal property.

The eight high-priority areas leave prosecutors bent on targeting marijuana businesses with a fair amount of leeway, especially the exception for "adverse public health consequences." And prosecutors have shown a willingness to aggressively interpret DOJ guidance in the past, as the many medical marijuana dispensary owners now behind bars can attest.

U.S. Attorneys will individually be responsible for interpreting the guidelines and how they apply to a case they intend to prosecute. A Justice Department official said, for example, that a U.S Attorney could go after marijuana distributors who used cartoon characters in their marketing because that could be interpreted as attempting to distribute marijuana to minors.

But the official stressed that the guidance was not optional, and that prosecutors would no longer be allowed to use the sheer volume of sales or the for-profit status of an operation as triggers for prosecution, though these factors could still affect their prosecutorial decisions.

The Obama administration has struggled with the legalization of medical marijuana in several states. Justice Department Officials had instructed federal prosecutors across the country not to focus federal resources on individuals who were complying with state laws regarding the use of medical marijuana. But the U.S. attorneys in several states that had legalized medical marijuana rebelled, and what was known as the Ogden memo faced stiff resistance from career prosecutors.

"That's just not what they do,” one former Justice official told HuffPost. “They prosecute people."

As a result of the internal pushback at DOJ, a new memo was issued by Deputy Attorney General James Cole in 2011 that gave U.S. attorneys more cover to go after medical marijuana distributors. Federal prosecutors began threatening local government officials with prosecution if they went forward with legislation regulating medical cannabis.

After recreational marijuana initiatives passed in Washington and Colorado in November, President Barack Obama said the federal government had “bigger fish to fry” and would not make going after marijuana users a priority.

Holder said back in December that the federal response to the passage of the state ballot measures would be coming “relatively soon.”

Washington Attorney General Bob Ferguson told HuffPost his office was preparing for the “worst-case scenario” of a federal lawsuit against the law.

UPDATE: 6:15 p.m. -- Senate Judiciary Committee Chairman Pat Leahy (D-Vt.), who'd been pressing Holder to make a decision and respect the will of the states' voters, applauded the move, saying in a statement that "the Justice Department should focus on countering and prosecuting violent crime, while respecting the will of the states whose people have voted to legalize small amounts of marijuana for personal and medical use." He had previously scheduled a hearing on the issue for Sept. 10.

At issue will be how the U.S. Attorneys will implement the directive. John Walsh, the lead prosecutor for the District of Colorado, has previously aggressively interpreted guidance from Justice higher-ups and targeted medical marijuana dispensaries that were not accused of breaking any state laws, like those that were operating near schools. His reaction Thursday to Holder's announcement might not give Colorado business owners much confidence that he intends to modify his approach.

"Of particular concern to the U.S. Attorney’s Office are cases involving marijuana trafficking directly or indirectly to children and young people; trafficking that involves violence or other federal criminal activity; trafficking conducted or financed by street gangs and drug cartels; cultivation of marijuana on Colorado’s extensive state and federal public lands; and trafficking across state and international lines," Walsh said. "In addition, because the Department of Justice’s guidance emphasizes the central importance of strong and effective state marijuana regulatory systems, the U.S. Attorney’s Office will continue to focus on whether Colorado’s system, when it is implemented, has the resources and tools necessary to protect those key federal public safety interests. To accomplish these goals, we look forward to closely working with our federal, state and local partners."

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Via Huffington Post

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