U.S. Issues Marijuana Guidelines for Banks

The Obama administration on Friday issued guidelines intended to give banks confidence that they will not be punished if they
provide services to legitimate marijuana businesses in states that
have legalized the medical or recreational use of the drug, even though it remains illicit under federal law.

The guidance, which requires banks to vigorously monitor their
marijuana-industry customers, was provided by the Treasury Department and the Justice Department in separate advisories.

The policy does not grant immunity from prosecution or civil penalties to banks that serve legal marijuana
businesses. But it directs prosecutors and regulators to give priority to cases only where financial institutions have failed to
adhere to the guidance.

Still, the banking industry was quick to say that the new guidelines would not be sufficient to make banks feel at ease about opening accounts for or granting
loans to marijuana businesses because the drug would still be illegal under the federal Controlled
Substances Act. “While we appreciate the efforts by the Department of Justice and FinCEN,
guidance or regulation doesn’t alter the underlying challenge for banks,” Frank Keating, president of the American Bankers Association, said in a statement, referring to the
Financial Crimes Enforcement Network, the Treasury unit that issued the guidelines. “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.”
Twenty states and the District of Columbia allow the use of marijuana for medical purposes, and two of those states, Colorado
and Washington, have also legalized the recreational use of the drug.

Those numbers may grow this year, as several other states are  considering measures to legalize marijuana use.

In a three-page memo to  prosecutors issued in conjunction with the new banking guidelines, Deputy Attorney General James M.
Cole wrote that prosecutions may not be “appropriate” when banks
do business with marijuana entities that are operating legally under state law and do not violate any of the eight priorities set forth in a Justice Department memo
last August. Those priorities include preventing the distribution of marijuana to minors and preventing revenue from the sale of marijuana from going to criminal enterprises.

Jennifer Shasky Calvery,director of the Financial Crimes Enforcement
Network, said she was unaware of any banks that have been punished over the years for servicing legal marijuana businesses. Legal marijuana
entrepreneurs have stressed that access to banking has been their most pressing concern. Their businesses are conducted almost
entirely in cash — raising huge security concerns —because it is difficult for them to open and maintain bank accounts, or to accept credit cards. Banks have
been apprehensive about providing services to marijuana businesses for fear that authorities might punish them for violating
money-laundering laws,among other federal statutes and regulations.

Last month, Attorney General Eric H. Holder Jr. acknowledged that having so much cash on hand
presented a public safety problem for legal marijuana businesses, adding that they should have access to the country’s banking system.

Some representatives of the
legal marijuana industry said that although the guidelines showed progress, federal laws need to be
revamped.

“It’s a great step in the right direction, but ultimately it would not solve all the problems here,” said Michael Elliott,executive director of the Marijuana Industry Group in Colorado. “We need to go
beyond saying that this is a low law enforcement priority. There are still
violations of federal law going on here. So, federal laws need to be changed to ensure that what is legal in states like Colorado is legal
at the federal level, as well.”

Marijuana remains a Schedule 1 drug — along with heroin, LSD and
Ecstasy — under the Controlled Substances Act.

This week, 18 members of Congress, in a joint letter to
President Obama, asked him to instruct Mr. Holder to remove marijuana from any of the drug schedules or to reschedule it to a lower category.

“Classifying marijuana as Schedule 1 at the federal level perpetuates an unjust and irrational system,” the lawmakers, led by  Representative Earl Blumenauer, Democrat of Oregon, said in the letter.

“Schedule 1 recognizes no medical use, disregarding both medical evidence and the laws of nearly half of the states that have
legalized medical marijuana.”

-NYT