As Colorado and Washington state move into the legalization of recreational marijuana, Attorney General Eric Holder says the U.S. is preparing to relax laws that have been problematic for recreational marijuana retailers. Most of them are operating almost exclusively as cash operations because of money-laundering laws that prohibit banks from doing business with cannabis-based businesses.
According to Reuters, “U.S. treasury and law enforcement agencies will soon issue regulations opening banking services to state-sanctioned marijuana businesses even though cannabis remains classified an illegal narcotic under federal law.” These new rules would “address problems faced by newly licensed recreational pot retailers in Colorado, and medical marijuana dispensaries in other states, in operating on a cash-only basis, without access to banking services or credit.”
The decision comes after state-licensed marijuana distributors in Colorado and elsewhere raised concerns about being forced to pay for everything—from inventory and wages to security and taxes—all in cash, which also puts them at high risk for robbery.
“You don’t want just huge amounts of cash in these places,” Holder said at a University of Virginia event. “They want to be able to use the banking system. And so we will be issuing some regulations I think very soon to deal with that issue.”
The news comes in the same month that Colorado became the first U.S. state to begin legally selling marijuana to adults for recreational purposes. Washington state will do the same later this year. Reuters reports that California, Oregon and Alaska, are also expected to consider legalizing recreational marijuana in 2014. But, the sale and distribution of marijuana—even for medical purposes—still technically breaks federal regulations, and by law, banks are not permitted to handle money from marijuana sales even in states where it’s legal.
Holder didn’t give a timeline for enforcing banking regulations, but he said “There’s a public safety component to this,” reports Reuters. “Huge amounts of cash — substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited — is something that would worry me just from a law enforcement perspective.”
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