The marijuana industry in Colorado has potential to be massive, yet there are still roadblocks preventing it from becoming a legitimate business endeavor.
One major hurdle holding marijuana growers, retailers and ancillary businesses back is the banking industry’s reluctance to allow businesses to open accounts or get small business loans. Of course, financial institutions’ fear is real. Marijuana is still illegal, according to federal law, and banks could easily be accused of money laundering.
Earlier this month, I wrote about the growing interest in marijuana-related enterprises in Colorado: “As of now, marijuana dispensaries still have trouble obtaining small business loans from banks that are unwilling to hold money for fear of being implicated in money laundering,” That, coupled with a tax code that still refers to marijuana sales as “drug trafficking” regardless of state law, has continued to make it hard for retailers to create thriving businesses. But most of the sources interviewed were optimistic that the Justice and Treasury departments would address the banking issue in the first quarter of this year.
They were right.
According to a New York Times article, Attorney General Eric H. Holder Jr. said Friday that the Obama administration is already working to fix the problem. Holder said that “lawful marijuana businesses should have access to the American banking system and that the government would soon offer rules to help them gain it,” according to the New York Times. “The rules are not expected to give banks a green light to accept deposits and provide other services, but would tell prosecutors not to prioritize cases involving legal marijuana businesses that use banks.”
As Holder pointed out, retailers are dealing with huge amounts of cash and have nowhere to put it, which is worrisome to him “from a law-enforcement perspective,” and is very risky, he said at the Miller Center at the University of Virginia. Holder said there will be regulations soon, but he didn’t go into detail on what those would be.
Although marijuana retailers now have a lifeline, the New York Times reported that the banking industry will require detailed guidelines and rules “for deciding whether banks feel comfortable taking deposits, giving loans or issuing credit cards to legal marijuana businesses. Without specific guidelines, many banks might continue to refuse transactions with legal marijuana businesses.”