Pubdate: Wed, 19 Feb 2014 Source: USA Today (US) Copyright: 2014 USA TODAY, a division of Gannett Co. Inc Contact: http://mapinc.org/url/625HdBMl Website: http://www.usatoday.com/printedition/news/index.htm Details: http://www.mapinc.org/media/466 Author: Trish Regan Page: 1B DAZED, CONFUSED ABOUT POT AT BANK Federal Moves Unlikely to Open Many Doors for Marijuna Dispensaries This marks the USA TODAY debut of Trish Regan, anchor and editor-at-large for Bloomberg TV. Trish was named one of the most popular business news anchors last year by BusinessInsider.com and has worked at CNBC, CBS and CBS MarketWatch. OK. So, maybe Dazed and Confused isn't the pot classic that Up in Smoke is, but the cult coming-of-age film set in the '70s featured enough grass to rank as Rolling Stone's No. 2 "Stoner Movie of All Time." More important, Dazed and Confused seems to perfectly capture the reaction to Friday's announcement from the Justice and Treasury departments aimed at addressing the biggest challenge facing the almost-legal marijuana industry today - lack of access to banks. Banks have refused to do business with marijuana dispensaries operating within the bounds of state laws for fear of being prosecuted themselves. Federal law classifies marijuana as a Schedule 1 drug on par with heroin, which means a bank doing business with a marijuana shop can be accused of money laundering and racketeering. This has left dispensaries in the 20 states and Washington, D.C., that allow marijuana distribution in a challenging position; they can't let their bankers know how they make money. At Denver Relief, a dispensary in Denver where the smell of cannabis permeates the room, workers undertake elaborate measures to ensure that the money they collect from pot sales doesn't smell. "There's no reason to rub somebody's nose in it," explains Ean Seeb, who runs the facility. Seeb places his cash in a sealed bag, in a separate safe, in a separate room - all in an attempt to keep it "clean." If a bank gets a whiff of his so-called dirty money (yes, money smells when surrounded by pot), his account will be shut down. Seeb is on his second account, while many of his pot colleagues have churned through as many as five banks in the last year. Friday's moves by the Justice and Treasury Departments gave many hope that the feds were making significant changes to address this banking problem. Instead, the memos show that the industry is still dealing with a basic issue: Despite all the changes to state laws, popular support and President Obama's recent remark that he considers marijuana no more dangerous than alcohol, marijuana is still 100% illegal under federal law. So, it's no wonder you might be dazed and confused listening to the reactions that followed the release of the memos. Aaron Smith of the NCIA (that's the National Cannabis Industry Association for those who aren't in the know) seemed quite pleased, telling local media he was "grateful" for the announcements. Ethan Nadelmann of the Drug Policy Alliance was also optimistic telling me, "Banks will be able to make money." But, the Colorado Bankers Association calls this guidance a red light for banks, stating, "At best, this amounts to 'serve these customers at your own risk,' and it emphasizes all of the risks." Where does this leave the fledgling multi-billion dollar industry? Very much where it's been. Although marijuana entrepreneurs are increasingly comfortable starting businesses under permissive state laws and a federal "look the other way" policy, the federally regulated banking system needs certainty. Banks are supposed to be conservative. Between the additional red tape associated with servicing a pot shop and the threat of a new administration reversing policy, the downside risks are too significant. Despite the industry's hopeful reaction, the view of the Colorado Banker's Association is likely far closer to that of your average bank president. If the Obama administration can't truly effect change, why is it warming to the idea of marijuana legalization? Cynics might argue the president is trying to establish the Democratic Party at the forefront of the marijuana movement ahead of this year's elections. With an increasing number of states looking to legalize marijuana, this could be the issue that brings younger, liberal Americans to the voting booths in swing states this November. In the meantime, I'd recommend dispensaries continue working hard to keep their money smelling clean. - --- MAP posted-by: Matt