Marking another milestone for the legal marijuana industry, the Obama administration on Friday said it has advised U.S. attorneys in states where the sale of marijuana is legal not to prosecute banks that allow pot stores to open accounts and accept credit-card payments.
The policy will apply to
The move was hailed as a step forward by proponents of marijuana sales, but banking organizations warned that accepting the deposits was still illegal and said it was unlikely to widely change banks' business practices.
"Legitimate marijuana businesses will no longer be forced to operate as cash-only businesses, a circumstance which has made them highly vulnerable to robbery and other criminal activities," said Democratic Rep.
"Until then, the nation's 7,000 banks will be highly reluctant to participate in this new type of commerce," he said.
No one's expecting
The change in
"There's a public safety component to this," Holder said in a speech at the
While accepting deposits from marijuana businesses remains a violation of money-laundering laws, prosecutors have wide discretion on what cases to pursue. And while the
Essentially, the administration is promising to let banks and pot stores work together, so long as they abide by some basic rules: preventing the distribution of marijuana to minors, preventing violence and making sure no pot is allowed on federal property, among others.
In a memorandum issued to all U.S. attorneys on Friday, Deputy Attorney General
In a separate memo, the
The new policy comes after the
Heck, a freshman who has made the issue a pet cause, said federal regulators deserve credit "for their diligence and thoroughness" in developing the new policy.
"There is still, however, more to do," Heck said. Even after the new policy is enforced, he said, "state and federal laws will remain in conflict with one another, and some financial institutions will continue to decline to provide banking services to legitimate marijuana businesses."
Legalization opponents are counting on it.
When Holder made his announcement last month,
"There's no assurance that a legal memo from DOJ is going to be enough for reputable banks to deal with a federally illegal substance," Sabet said. "Banks would have legitimate concerns that the mom-and-pop store they think they are dealing with is actually a front for something much more serious, hidden under the shroud of legal marijuana."
"Until federal laws are actually changed, many state-legal marijuana businesses may still be forced to operate on a cash-only basis," Angell said.
Most Popular Stories
- High-Tech Home Theaters Undergoing a Revolution
- Nestle, Superior Grocers Promote Healthy Meals
- China Slows Down: The Cohen Column
- Bernanke Wishes He'd Explained the Crisis Better
- Hollywood Bets Big Again on Summer Movies
- EPA Eases Back on Biofuels Mandate
- Stocks See 6th Gain in a Row on Solid Earnings
- Ellen DeGeneres Producing HGTV Series
- Biden Leaves Ukraine as Russian Invasion Threat Rises
- IRS Awards Bonuses to Employees Who Owe Back Taxes