Pubdate: Mon, 27 Jan 2014
Source: Washington Times (DC)
Copyright: 2014 The Washington Times, LLC.
Contact:  http://www.washingtontimes.com/
Details: http://www.mapinc.org/media/492
Author: Valerie Richardson

COLORADO GROUPS WELCOME HOLDER SHIFT ON POT MONEY

AG to Make It Easier for Banks to Work With Legal Sellers

DENVER - Attorney General Eric H. Holder Jr.'s promise to issue rules 
making it easier for banks to do business with legal marijuana 
sellers is being viewed in Colorado with cautious optimism, with an 
emphasis on the caution.

Having to conduct transactions in cash has been a huge drawback for 
Colorado's nascent retail marijuana shops, which launched Jan. 1, but 
it may take more than a Justice Department guidance to solve the problem.

"At best, Holder's statement is a 'proceed with caution' yellow 
light," Don Childears, president and CEO of the Colorado Bankers 
Association, said in a statement. "While we are encouraged that the 
attorney general has stressed cessation of prosecution, we don't 
anticipate that bank regulators are prepared to tell banks they can 
ignore federal drug law. Two of those bank regulators are outside the 
executive branch and won't necessarily follow the AG's view."

Mr. Holder said in remarks late last week at the University of 
Virginia that he would release "very soon" a guidance to federal 
prosecutors and law enforcement giving wiggle room to banks that 
provide business accounts to marijuana clients in violation of 
federal banking laws.

"You don't want just huge amounts of cash in these places. They want 
to be able to use the banking system," said Mr. Holder. "There's a 
public safety component to this. Huge amounts of cash, substantial 
amounts of cash just kind of lying around with no place for it to be 
appropriately deposited, is something that would worry me, just from 
a law enforcement perspective."

He's not the only one worried. In Colorado, retail pot sellers have 
expressed worries about becoming juicy targets for thieves. The 
state's 30-plus stores are doing roughly $1 million in combined 
business per day, resulting in piles of cash but few places to deposit it.

Michael Elliott, executive director of the Marijuana Industry Group 
in Denver, said he was "encouraged" by Mr. Holder's statement.

"Everyone recognizes that the banking issue has created serious 
public safety and accountability problems for this new industry," Mr. 
Elliott said in a statement. "We urge Mr. Holder, the Treasury 
Department and the Obama administration to move quickly to create 
regulations that allow the legal marijuana industry, its employees, 
and customers to do business with banks just as any other business 
sector does."

That may take more than a go-ahead by Mr. Holder. Mr. Childears said 
that for Colorado bankers, "the only real solution is literally an 
act of Congress," given that offering services for pot shops isn't 
viewed by most banks as a "high priority."

"Some banks might be tempted to take on this business, but we have 
trouble believing that any bank would risk regulatory problems by 
doing so without great confidence on a number of fronts, including a 
low threat of prosecution now and in the future; a high probability 
there will be no action by bank regulatory agencies on a variety of 
federal laws; internal comprehensive compliance regimens to comply 
with applicable law and several other factors," said Mr. Childears. 
"We don't see that happening."

The banking law disconnect isn't confined to Colorado. In June, 
Washington is expected to launch its retail marijuana market. Both 
Colorado and Washington voters approved in November 2012 initiatives 
allowing retail sales of recreational marijuana for adults 21 and over.

Other states are expected to consider similar measures, starting with 
Alaska, where organizers are moving to place a legalization 
initiative on the August ballot.
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MAP posted-by: Jay Bergstrom