The U.S. Department of Justice is working with federal bank regulators to allow banking and other financial services for legal pot merchants in Colorado and Washington, the two states that have legalized adult possession of small amounts of marijuana.
Responding to the first question asked today by Sen. Patrick Leahy, D-Vt., chair of the Senate Judiciary Committee, Deputy Attorney General James Cole acknowledged the current dilemma that without changes at the federal level, legal pot stores in Colorado and Washington will operate on a cash-only basis because banks fear they’ll violate federal law by accepting money from pot businesses.
“We are currently talking with bank regulators on ways we can deal with this,” Cole said. He was not more specific.
A fix could come through a congressional change in the law. But few are expecting Congress to act quickly on marijuana.
An easier solution would be an administrative order directing the Treasury Department to stop requiring regulatory reports whenever a bank handles what it thinks is marijuana money.
Cole’s response suggests the federal government is working on the latter, easier course. Leahy said DOJ should offer “specific guidance to Treasury.”
Leahy also told Cole that the Drug Enforcement Administration’s recent warning that armored transport cars should not engage in legal pot business was a “significant step away from reality.”
Cole said DEA was merely asking questions and that was before Cole’s memo last month that said the federal government wouldn’t sue to stop legal pot in Colorado and Washington if their systems adhered to eight federal priorities, such as preventing youth access to pot and preventing legal pot from leaking into other states.
King County Sheriff John Urquhart later told the committee his concerns about a cash-only pot stores. “They will be prime targets for robberies and very difficult to audit,” Urquhart said.