On Marijuana, Feds Plan to Address Banking Issue

Sep 10, 2013

The Department of Justice has let it be known that it won’t interfere with Washington’s legal marijuana industry. But when pot stores do come to Washington, they won’t be able to deposit their money in a bank or accept credit cards. That’s because the pot business, still illegal under federal law, is off-limits to federally-regulated banks.

King County Sheriff John Urquhart testified before the Senate Judiciary Committee in Washington D.C. Tuesday. He says businesses that deal only in cash present problems for police.

“Cash-only businesses [are] a prime target for armed robberies, and cash-only businesses are very difficult to audit,” Urquhart said.

The Justice Department didn’t address the banking hurdle when it announced its hands-off approach last month. But Deputy Attorney General James Cole told the senators he’s aware of it.

“We agree this is an issue that needs to be dealt with,” he said.

Cole said DOJ officials are in talks with the Treasury Department’s Financial Crimes Enforcement Network, which goes after criminal activities like money laundering.

“And they're talking with and bringing in bank regulators to discuss ways this could be dealt with in accordance with the laws that we have on the books today,” he said.

Cole says an all-cash business could be a magnet for guns and crime.

Committee chairman Sen. Patrick Leahy, D-Vt., urged Cole to give specific guidance to regulators and drug enforcement personnel, saying, “I don’t want to see a shootout somewhere.”