There’s a whole lot of cash sitting in marijuana shops in Washington state, Colorado and elsewhere, with less than 3 percent of the nation’s banks and credit unions willing to do business with them.
And with another eight states voting last month to expand access to legal marijuana, the number of all-cash businesses will balloon in coming years.
While the issue has long been a concern for pot growers and sellers, Washington state Democratic Sen. Patty Murray and nine other U.S. senators now say the lack of access to banking services is harmful to vendors who work with marijuana businesses, too.
“This long list of professionals includes chemists who have had their checking accounts closed due to their role in testing marijuana for the presence of harmful materials like arsenic, the security industry – which marijuana businesses heavily rely on due to the massive amounts of cash they handle, and lawyers offering legal services to marijuana businesses, who have reported banks denying applications for bank accounts and credit cards,” the senators wrote in a letter to the U.S. Treasury Department’s Financial Crimes Enforcement Network.
In the letter, the senators complained that the issue is “creating huge logistical and safety problems for communities across the country,” with the all-cash pot businesses “a huge target for criminals.”
In 2014, the Obama administration 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.
But with marijuana still banned by Congress, most have been unwilling to take the risk, knowing the rules could easily change with a new president.
According to Murray and the other senators, only 301 of the 11,954 federally regulated banks and credit unions have chosen to serve marijuana businesses so far.
And the senators said the Obama administration’s guidance to prosecuting attorneys did not distinguish between state-sanctioned businesses and vendors that want to provide services to them.
Without access to federal banking services, the senators said the current business environment for the rapidly growing U.S. marijuana industry and its vendors has become “an invitation to tax fraud, robberies and organized crime.”
The nine others who signed the letter were: Democratic Sens. Jeff Merkley and Ron Wyden of Oregon, Kirsten Gillibrand of New York, Elizabeth Warren of Massachusetts, Al Franken of Minnesota, Cory Booker of New Jersey, Independent Sens. Bernie Sanders of Vermont and Angus King of Maine and Republican Sen. Lisa Murkowski of Alaska.