On Friday, the Obama Administration gave the banking industry approval to work with marijuana businesses, accepting their money in accounts and providing them with financing without risk of facing federal charges for aiding illegal activity.
The Treasury Department issued new rules that makes it easier to do businesses with marijuana dispensary owners. The Justice Department also directed US attorneys to not target banks that do business with legal marijuana businesses as long as the business owners adhere to the eight guidelines to avoid prosecution that the DOJ released last August.
Now, banks must file a “marijuana limited” report to provide the Treasure department that explains that the account is held by a marijuana business owner that is in compliance with the government’s guidelines. This in in contrast to past policy, wherein banks had to provide notice to the federal government if there was any suspicious activity, including any association with marijuana.
If banks believe that a marijuana business is operating outside of the DOJ’s guidelines, then a “marijuana priority” report would be filed to alert regulators.
The move is being lauded by marijuana supporters. Many dispensary and shop owners have faced difficulties when it comes to managing their finances and their business because they could not open a bank account, or would swiftly get dropped by the banks when their business was discovered.
Some anti-marijuana advocates, including lawmakers, are troubled by the conflict between state and federal law. Some believe that this new memo encourages the violation of federal law.
“Marijuana trafficking is illegal under federal law, and it’s illegal for banks to deal with marijuana sale proceeds under federal law. Only Congress can change these laws. The administration can’t change the law with a memo,” Sen. Chuck Grassley (R-Iowa), ranking member of the Senate Judiciary Committee, said in a statement.
Despite the change in rules, it is unclear how that will impact the policies of individual banking institutions. Some may see this as an opportunity to get in on a $2 billion industry, while others may continue to play it safe, as the memo does not actually make changes to the law.
This decision impacts 20 states, plus Washington DC, that have legalized either medical or recreational marijuana.