Good Friday came a little early for Marijuana businesses as US Government gave a green signal to banks to do business with them.
Earlier it was rumored that marijuana growers and retailers have registered their bank accounts in the name of businesses that are miles apart from the pot industry. They were unable to deposit their sums to banks too directly, as the banks are regulated by the Federal Government and federal law prohibits marijuana overall.
On the other hand, banks too dreaded to be punished by Feds in case they do business with the marijuana retailers. Some businesses even did marijuana trading in hard cash, and eventually paid their taxes using the same mode of payment.
“Now that some states have elected to legalize and regulate the marijuana trade, FinCEN seeks to move from the shadows the historically covert financial operations of marijuana businesses,” noted FinCEN Director Jennifer Shasky Calvery. “Our guidance provides financial institutions with clarity on what they must do if they are going to provide financial services to marijuana businesses and what reporting will assist law enforcement.”
The announcement by the justice department and US treasury came as a big relief for both marijuana trading industry and the banks. Their memorandum was also addressed to all United States attorneys, detailed with guidance regarding marijuana enforcement.
Taking the Controlled Substance Act (CSA), signed into law by President Richard Nixon in 1970, the “Cole-memo” put pressure on civil bodies to keep their alert on cases that are blaspheming the set of guidelines regarding the use of marijuana, such as selling it to minors, its trafficking across borders, and cartel involvement.
“I hope today’s guidance prompts some in the financial industry to begin providing basic financial services to these Colorado small businesses,” said Rep. Ed Perlmutter (D-Colorado). “Solving the banking component is one of the last hurdles of having a robust and safe regulatory regime here in Colorado.”
Meanwhile, banks can do business with the marijuana trading industry without any fears in the wake of FinCEN’s press release.
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