Banking and Marijuana: Unlikely Partners in Fighting Crime?

• By: Staff Editor
• Date: October 21, 2015

Banking and Marijuana: Unlikely Partners in Fighting Crime?

Conflicting federal and state laws often set the stage for interesting and pressing debates. While the arguments over legalizing marijuana rages on, nothing really can be done to stop where this is headed. With one half of the US legalizing the use of marijuana in one form or the other, read medical or recreational, and four states and D.C. legalizing possession for recreational use, it’s no longer about the debates, it’s about creating a robust ecosystem to strengthen the legal parameters.

Marijuana and Federal Laws

The federal law is rooted in its stand on the matter - it classifies marijuana as a Schedule I drug. The U.S. Justice Department further clarifies the federal law by defining the drug as having, “no currently accepted medical use in the United States.”

It allows states to legalize its use and mandates a regulated system, but shuts the door on showing any extended support.

Marijuana and State Laws

As of now, state laws pertaining to regulating the industry are fragmented. With Alaska permitting the cultivation of up to 24 plants per individual to Texas deeming possession, sale or cultivation illegal, there is a huge divide in the lawmakers’ perspective.

The public outlook on the matter though has evolved over the years. Since the late ‘60s there has been a steady climb in supporters seeking to legalize the use of marijuana. The figures? Up from a mere 12% in 1969 to an imposing 58% in 2013.

If you are thinking, “Ah teenagers,” think again. From law enforcement professionals to the health care industry, pot has its supporters for myriad reasons.

How Does the Conflict Affect Government Coffers?

When you own a business that the federal government deems legal, you enjoy liberties you don’t think twice about – writing a check out for payments, paying taxes online, seeking a business loan, and so on.

The other side of the pasture though is quite dreary. Since the federal law considers the marijuana industry an illegal one, the national banking system has to stay in accordance with federal law; the banking system then becomes off limits to marijuana dispensaries. This means a lot of cash transactions for those involved, not to mention the millions in service tax the government loses out on every fiscal year.

Of course this loss alone isn’t the point of focus. The focus is on the fact that there is scope here to rein in some order where mayhem exists; for instance, law enforcement can target drug cartels instead of legitimate marijuana businesses that stay in accordance with the law.

The jury is yet to reach a verdict on the social impact behind adapting effective marijuana regulations. And the banking sector seems to be the place to begin with when the time comes for reforms.

Given the climate of change and overall support for legalizing the cannabis industry, a banking compliance program that seeks to be inclusive of these businesses and their needs is on the cards for most banks. Gearing up to meet federal and state requirements amid the divide is a slippery wall to scale, but a job that must be done nonetheless.

Additional Resources:

•       Banking and Marijuana: When Federal and State Laws Collide – Warren R Markowitz 

•       Effect of the Marijuana Laws in the Workplace - Mary Jane Brought Pot Brownies! - Deirdre Kamber Todd 

•       Workplace Drug and Alcohol Testing - Current Issues on Medical Marijuana, K2, Spice and Hair Testing - Kent Peterson