Marijuana is now legal under the laws of four states and the District of Columbia, but not under federal law. And this creates huge headaches for marijuana businesses:
Two years after Colorado fully legalized the sale of marijuana, most banks here still don’t offer services to the businesses involved.
Financial institutions are caught between state law that has legalized marijuana and federal law that bans it. Banks’ federal regulators don’t fully recognize such businesses and impose onerous reporting requirements on banks that deal with them.
Without bank accounts, the state’s burgeoning pot sector—2,500 licensed businesses with revenue of $1 billion a year, paying $130 million in taxes—can’t accept credit or debit cards from customers, Colorado officials say.
Marijuana-related businesses instead use cash to pay their employees, purchase equipment or pay taxes to the state. Reports abound of business owners refurbishing retired armored bank trucks to transport money and hiring heavily armed security guards.
The best solution is repeal of federal prohibition. This is not on the policy table yet, but if more states legalize marijuana in November (at least five states are likely to vote on the issue), the pressure on federal policy might just hit the boiling point.