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The U.S. government took a step toward legitimizing the marijuana industry, allowing U.S. banks to offer accounts and other services to businesses in states where medical or recreational pot sales are legal.
The Treasury’s Financial Crimes Enforcement Network issued guidelines for banks intended to reduce the danger that sellers face in operating an all-cash business. The rules would also give law enforcement more information about marijuana business activity, the agency said Friday in a statement.
“The idea that we can get checks written for stuff and use our credit cards, and paying taxes online would be fantastic,” said Elliott Klug, 36, co-founder of PinkHouse Blooms LLC, a chain of medical-marijuana dispensaries in Denver. He said he’s been using cash to pay $30,000 to $40,000 a month in state and local taxes and fees.
Marijuana remains an illegal substance under federal law. The guidelines were sought by pot businesses and the governors of Colorado and Washington state, whose voters in 2012 approved the first sales of marijuana for recreational use. Twenty states also permit medical marijuana.
Marijuana stocks rallied on the news, with Medbox Inc., which sells automated dispensing systems, surging $6.70, or 26.8 percent, to $31.75 Friday in New York.
“Financial institutions can provide services to marijuana-related businesses in a manner consistent with their obligations to know their customers and to report possible criminal activity,” according to the Treasury statement.
Banking groups said the guidelines weren’t enough to encourage U.S. banks to do business with the marijuana industry.
The Treasury decision “doesn’t alter the underlying challenge for banks,” Frank Keating, president of the Washington-based American Bankers Association, said Friday in an emailed statement.
“As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions,” he said.
Lenders will be skeptical and cautious about the Obama administration guidelines because a future president could change them, leaving them vulnerable to prosecution, said Camden Fine, president of the Independent Community Bankers of America, a Washington-based group representing small banks. (Bloomberg)
The Treasury’s Financial Crimes Enforcement Network issued guidelines for banks intended to reduce the danger that sellers face in operating an all-cash business. The rules would also give law enforcement more information about marijuana business activity, the agency said Friday in a statement.
“The idea that we can get checks written for stuff and use our credit cards, and paying taxes online would be fantastic,” said Elliott Klug, 36, co-founder of PinkHouse Blooms LLC, a chain of medical-marijuana dispensaries in Denver. He said he’s been using cash to pay $30,000 to $40,000 a month in state and local taxes and fees.
Marijuana remains an illegal substance under federal law. The guidelines were sought by pot businesses and the governors of Colorado and Washington state, whose voters in 2012 approved the first sales of marijuana for recreational use. Twenty states also permit medical marijuana.
Marijuana stocks rallied on the news, with Medbox Inc., which sells automated dispensing systems, surging $6.70, or 26.8 percent, to $31.75 Friday in New York.
“Financial institutions can provide services to marijuana-related businesses in a manner consistent with their obligations to know their customers and to report possible criminal activity,” according to the Treasury statement.
Banking groups said the guidelines weren’t enough to encourage U.S. banks to do business with the marijuana industry.
The Treasury decision “doesn’t alter the underlying challenge for banks,” Frank Keating, president of the Washington-based American Bankers Association, said Friday in an emailed statement.
“As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions,” he said.
Lenders will be skeptical and cautious about the Obama administration guidelines because a future president could change them, leaving them vulnerable to prosecution, said Camden Fine, president of the Independent Community Bankers of America, a Washington-based group representing small banks. (Bloomberg)
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Articles by Korea Herald
