Federal law that makes it difficult for the marijuana industry to access the banking system should be rethought. That’s the message from members of Colorado’s congressional delegation, which has sent a letter to officials at the U.S. Treasury and Justice departments.
At issue is the Banking Secrecy Act of 1970, which determines how banks must handle and report transactions thought to have derived from illegal activity. Sales of medical marijuana have been legal in Colorado since 2000, and about 20 other states also allow medical marijuana. As of Jan. 1, recreational marijuana is legal in Colorado, and soon will be in Washington state. Despite changes in state law, marijuana remains illegal under the federal Controlled Substances Act.
Although the feds are – so far – taking a “hands-off” approach to these state legalization initiatives, more clarity is needed, especially in the banking system. Some marijuana businesses access banking services by not revealing the source of their funds. But it’s a dangerous game, with businesses dealing largely in cash.
This creates a danger for customers, proprietors and bankers, making them a target for robbers. It also makes it more difficult to enforce Colorado’s hefty sales tax on marijuana sales, the letter argues.
The letter was signed by Sens. Michael Bennet and Mark Udall, and Reps. Ed Perlmutter, Jared Polis and Diana DeGette.
The merits of legalization of marijuana can be debated, but the fact remains that legalization has occurred. Colorado state officials have worked hard to create a retail and regulatory system that allows the transactions, with ample local and state oversight.
But federal banking restrictions make it difficult to assess how these regulations are working. We urge federal officials to accept the logic of the congressional delegation and allow banking by the marijuana sector, at least where it is legal under state law.
