Wednesday, February 15, 2012

Feds Threaten Banks to Deny Accounts to Lawful Medical Cannabis Shops

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Eric Blair
Activist Post

One of the underhanded ways the feds are attempting to defeat legal medical marijuana is by preventing banks from doing business with dispensaries.

Because medical marijuana is illegal under federal law, federally insured banks even in states where it's legal were notified in 2011 to be suspicious of marijuana-related banking activities. The warnings stated that the business of marijuana is a "high-risk area for money laundering" which would put the banks at risk of racketeering and laundering charges.

Even though banks were not directly ordered to deny services to lawful medical cannabis shops, most banks heeded the warnings and closed dispensary accounts anyways.  This forced patients and dispensaries into cash-only transactions.

Clearly, this presented legal dispensaries and patients with challenges; not least becoming an increased target of theft.  Additionally, it's easier for these shops to hide actual profits now that they are forced into a cash operation, seemingly nullifying the scare of money laundering.

In other words, it'd be much easier to track their transactions if allowed to be properly funneled through banks.  In Colorado, around $20 million a year in state and local taxes may be at risk because the business is being forced to operate in the darkness of cash-based black markets.

Colorado lawmakers, seeking a solution, proposed establishing a cooperative financial institution (resembling a credit union) for the state's 600 legal dispensaries. Colorado Congressman, Jared Polis, a supporter of the local measure, also proposed federal legislation to open financial services to lawful medical marijuana businesses.

Polis, perhaps realizing Colorado's state lawmakers represented the only hope for a fast banking solution, confronted Attorney General Holder about interfering with state laws to regulate medical cannabis, where Holder assured him that they have not intention to do so:

Yesterday, the Colorado State Finance Committee debated the proposal for a local cooperative financial institution to help dispensaries process payments, store money, and even make loans to other depositors.

However, the Associated Press reported late last night that the proposal was rejected by the committee because lawmakers still feared federal intervention.

"This bill attempts to address this big problem for the industry, the lack of financial services. But what it cannot do is get around the federal money-laundering piece of this," University of Denver law professor, Sam Kamin, told the Associated Press.

In June 2011, Obama reversed his stance of letting states decide their own medical cannabis policies with a Justice Department memo stating, "Those who engage in transactions involving the proceeds of such activity may also be in violation of federal money laundering statutes and other federal financing laws."

The continued confusion as to how the feds will deal with state laws pertaining to medical marijuana is intimidating other states to suspend their progress in allowing patients to seek natural alternatives to medical ailments.

In May, 2011, Rhode Island suspended their dispensary program fearing federal crackdowns. This year Arizona sued the federal government to clarify how they would treat their approval of medical marijuana.  The suit was dismissed, and Arizona will now move forward.

However, most recently, Delaware also suspended its medical marijuana program. US Attorney for Delaware, Charles M. Oberly III, threatened that "state employees who regulated the medical marijuana industry might not be safe from federal prosecution."

Oberly also pointed to the problem with banking as one of the reasons for recommending the suspension of the program: "Moreover, those who engage in financial transactions involving the proceeds of such activities may also be in violation of federal money laundering statutes."

Thus, even though the feds have made no direct orders for banks to refuse lawful dispensary business, the threats and intimidation of prosecution have been enough to not only halt mutual business relationships, but also to produce a domino effect of paralyzing medical marijuana legislation in other states.

What's more, international banks have been caught repeatedly laundering money for major drug cartels and face nothing more than a slap on the wrist from the feds.  In fact, the U.N. and IMF estimated in 2010 that "Up to 1.5 trillion dollars in drug money are laundered through legal enterprises, accounting for 5% of global GDP."

These illegal drug deposits are clearly more important to the banks than the measly fines they pay when they're exposed and prosecuted.  Perhaps it's time to put aside hypocrisy and start allowing legal enterprises to work with local credit unions.

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Anonymous said...

the fed needs to hands off the states on this matter as ron paul has come out for.....

Anonymous said...

AG Eric Holder is a liar and a con man.

Anonymous said...

join 'meditation @ 4:20/mmj'


Marijuana is great for averting cancer so therefore, the government wants us to get cancer.

peter james said...

No More Tears - The End Game

Lancifer said...

Store wealth in a real currency then...silver, and do all other transactions in cash. Pretty darn simple.

Anonymous said...

It is a fact that the state laws are above the federal laws, the feds do not want anyone to remember that fact. The state laws always trump the federal laws. The federal government is only there to protect us from foreign armies. Everything else they do is just a power grab. The states need to just say no to the feds and mean it. We The People created the state and federal government to serve us, if they do not serve us we need to create change a good way to start is to just say No to illegal laws, which is any "law" or "code"that goes against the US Constitution And/or the Bill of Rights. Just say I DO NO CONSENT to these illegal laws. We are 305 million strong in this country, it is truly up to us! And vote Ron Paul!

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