Colorado Moving to Keep Marijuana Transactions Safe from Feds
Colorado Democrat Rep. Ed Perlmutter is hoping to make the banking industry more pot-friendly by immunizing banks from prosecution by federal authorities if they handle money from marijuana businesses operating in compliance with their state laws.
Ironically, while the marijuana market has been slowly making its way from the shadows into the mainstream, one aspect of selling pot remains the same as always — even in pot-friendly havens like Colorado, it’s a still mostly a cash-only business.
Because marijuana is illegal under federal law, business owners find that they can’t open a checking account at a national bank, or qualify to accept credit card payments. Bankers are concerned about handling what the government still considers to be illicit drug money.
That’s a serious problem in a state like Colorado, which had $200 million in medical marijuana sales in 2012 (which generated $5.4 million in sales tax). Since the state recently legalized marijuana for recreational use and begun setting out rules for its above-board sale in state-regulated pot shops, that number is expected to climb.
Eighteen states and the District of Colombia have legalized marijuana for medical uses, with new states introducing similar legislation every year. Along with Colorado, voters in Washington also legalized recreational pot use for adults in November.
“Each year, my companies contribute to the $5 million in tax revenue Colorado collects from the sales of medical marijuana,” said Jamie Lewis, the owner of two medical marijuana dispensaries in Denver, in a press release from the National Cannabis Industry Association.
“Just like any other small business, we submit payroll taxes and unemployment insurance for our staffers,” she said. “Making those tax payments is unnecessarily challenging because we do not have access to banking services other local businesses take for granted.”
Dealing in cash is also dangerous. Having large sums on hand at marijuana retailers was cited as a primary safety concern during debate over the regulations during the last legislative session.
Perlmutter’s bill would protect banks and their employees from federal punishment — including prosecution and forfeiture. It also exempts marijuana businesses from certain disclosures and reporting requirements meant to identify those who are engaged in federally prohibited activities.
The bill has bipartisan support.
“Providing much-needed clarification to financial institutions will not only make it easier for our industry to continue paying the hundreds of millions in taxes and governmental licensing fees we pay each year, it will protect public safety by ensuring the industry isn’t forced into a cash economy,” said National Cannabis Industry Association director Aaron Smith, in a statement that noted the legal pot market is already worth $200 billion annually.
“This is not about whether marijuana should or shouldn’t be legal — it simply addresses the existing crisis that puts the lives of business owners at risk,” he said. “This conflict between state and federal laws must be resolved before a true tragedy occurs.”
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