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LeBlanc writes: "U.S. Sen. Elizabeth Warren, a Massachusetts Democrat, is leading an effort to make sure vendors working with legal marijuana businesses, from chemists who test marijuana for harmful substances to firms that provide security, don't have their banking services taken away."

Senator Elizabeth Warren. (photo: Win McNamee/Getty Images)
Senator Elizabeth Warren. (photo: Win McNamee/Getty Images)


Senator Warren Seeks to Pull Pot Shops Out of Banking Limbo

By Steve LeBlanc, Associated Press

02 January 17

 

s marijuana shops sprout in states that have legalized the drug, they face a critical stumbling block - lack of access to the kind of routine banking services other businesses take for granted.

U.S. Sen. Elizabeth Warren, a Massachusetts Democrat, is leading an effort to make sure vendors working with legal marijuana businesses, from chemists who test marijuana for harmful substances to firms that provide security, don't have their banking services taken away.

It's part of a wider effort by Warren and others to bring the burgeoning $7 billion marijuana industry in from a fiscal limbo she said forces many shops to rely solely on cash, making them tempting targets for criminals.

After voters in Warren's home state approved a November ballot question to legalize the recreational use of pot, she joined nine other senators in sending a letter to a key federal regulator, the Financial Crimes Enforcement Network, calling on it to issue additional guidance to help banks provide services to marijuana shop vendors.

Twenty-eight states have legalized marijuana for medicinal or recreational use.

Warren, a member of the Senate Banking Committee, said there are benefits to letting marijuana-based businesses move away from a cash-only model.

"You make sure that people are really paying their taxes. You know that the money is not being diverted to some kind of criminal enterprise," Warren said recently. "And it's just a plain old safety issue. You don't want people walking in with guns and masks and saying, 'Give me all your cash.'"

A spokesman for the Financial Crimes Enforcement Network said the agency is reviewing the letter.

There has been some movement to accommodate the banking needs of marijuana businesses.

Two years ago, the U.S. Department of the Treasury gave banks permission to do business with legal marijuana entities under some conditions. Since then, the number of banks and credit unions willing to handle pot money rose from 51 in 2014 to 301 in 2016.

Warren, however, said fewer than 3 percent of the nation's 11,954 federally regulated banks and credit unions are serving the cannabis industry.

Taylor West, deputy director of the National Cannabis Industry Association, a trade organization for 1,100 marijuana businesses nationwide, said access to banking remains a top concern.

"What the industry needs is a sustainable solution that services the entire industry instead of tinkering around the edges," Taylor said. "You don't have to be fully in favor of legalized marijuana to know that it helps no one to force these businesses outside the banking system."

Sam Kamin, a professor at the University of Denver Sturm College of Law who studies marijuana regulation, said there's only so much states can do on their own.

"The stumbling block over and over again is the federal illegality," he said.

The federal government lumps marijuana into the same class of drugs as heroin, LSD and peyote. Democratic President Barack Obama's administration has essentially turned a blind eye to state laws legalizing the drug, and supporters of legalizing marijuana hope Republican President-elect Donald Trump will follow suit.

Trump officials did not respond to a request for comment. During the presidential campaign, Trump said states should be allowed to legalize marijuana and has expressed support for medicinal use. But he also has sounded more skeptical about recreational use, and his pick for attorney general, Alabama U.S. Sen. Jeff Sessions, is a stern critic.

Some people in the marijuana industry say the banking challenges are merely growing pains for an industry evolving from mom-and-pop outlets.

Nicholas Vita, CEO of Columbia Care, one of the nation's largest providers of medical marijuana products, said it's up to marijuana businesses to make sure their financial house is in order.

"It's not just as simple as asking the banks to open their doors," Vita said. "The industry also needs to develop a set of standards that are acceptable to the banks."


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+7 # PeacefulGarden 2017-01-02 09:45
Warren for President!
 
 
+4 # DongiC 2017-01-02 09:58
Second the motion,
 
 
+5 # TJGeezer 2017-01-02 11:02
Quoting DongiC:
Second the motion,

Wouldn't it be wonderful? But she's already got a helluva bully pulpit and she's been changing the national dialog (and challenging both DNC and RNC wings of the System-As-Is Party) very effectively. It'd be a shame to lose her there.
 
 
+8 # elizabethblock 2017-01-02 10:06
Do credit unions also do this? Maybe we need a new kind of banking service. Well, obviously we do! Look at the check-cashing places, that charge usurious fees.
There's a move in Canada to have the Post Office offer bank accounts, as Britain used to do. Great idea.
 
 
+4 # ReconFire 2017-01-02 10:26
I hope it's not to little to late. Full access to banking services would have gone a long way to preventing the industry from being crushed by the drug warriors. This should have happened a long time ago, not on the eve of psychopath Sessions taking office.
 
 
+1 # TJGeezer 2017-01-02 11:07
"Some people in the marijuana industry say the banking challenges are merely growing pains for an industry evolving from mom-and-pop outlets."

Wow. My neighborhood mom-and-pop convenience store never had marijuana for sale when I grew up. Or maybe they just didn't advertise and I didn't think to ask...? I'd go back and ask them now, but they went out of business years ago when a 7-11 opened across the street.
 
 
-6 # lnason@umassd.edu 2017-01-02 11:35
This effort is fine and needed but what about all the other legal businesses which have been dropped by their banks or had their assets confiscated by the states due to the new banking rules? These other legal businesses are often gun shops, short-term lenders, or other businesses which Warren and other legislators don't like but even convenience stores, auto body shops, restaurants, motels, and other businesses have been bankrupted by the insane and unjust "guilty until proven innocent" banking regulations.

Stop the drug war, sure. But also stop the war on banks and small business.

Lee Nason
New Bedford, Massachusetts
 
 
+6 # MidwestDick 2017-01-02 12:03
Wow! You are a single minded fellow. Small lenders and gun shops! An important part of the Conservative economic infrastructure. Must be protected against confiscatory usury laws and gun control laws or they will go out of business.
Concerning the juice industry, they are gangsters and thieves operating under color of law. They don't need our help. They belong in jail, but will, like their fellow banksters, never see a day in the slammer.
And the gun stores, well maybe they will need a few bucks to keep them afloat when the NRA can no longer make rain for them with the fear Obama campaign.
But for me utopia is a place where it is easy to buy weed and borrow money at a reasonable rate and there are no guns.
An opposite vision to the conservative kakatopia, where the rich and powerful exploit the poor and use them for target practice.
 
 
+4 # PeacefulGarden 2017-01-02 12:58
Oh, Lee! Short-term lenders? You mean pay day lending. Lee, there is nothing to say to you. There is no need to argue. However, you are scum, deregulate pay day lending. How slimy can you get?
 

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