Banks Cleared to Do Business with Marijuana Shops
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The Obama administration announced new guidance for banks Friday, allowing them to do business with legal marijuana dispensaries. The Treasury's Financial Crimes Enforcement Network gave institutions the green light to accept money from marijuana shops as long as they ensure that the operations they are dealing with are legitimate.
The issue is clear in Colorado and Washington, where recreational marijuana is legal. However, complications arise in other areas, as state and federal laws contradict each other when it comes to the product.
Shops cannot violate government priorities, such as trafficking marijuana into states where it remains illegal or stopping sales to minors. Banks are also obligated to report possible criminal activity.
"Now that some states have elected to legalize and regulate the marijuana trade, FinCEN seeks to move from the shadows the historically covert financial operations of marijuana businesses," said director Jennifer Shasky Calvery.
The guidelines are expected to help promote greater financial transparency and legitimacy to an industry that has previously been all-cash. It also gives law enforcement greater insight into legal marijuana activity.
A key banking lobby warns that as long marijuana possession and distribution violate federal law, banks could still face the risk of prosecution.
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