Pubdate: Wed, 05 Mar 2014
Source: Washington Times (DC)
Copyright: 2014 The Washington Times, LLC.
Author: Stephen Dinan
Page: A4


Look to Gain From Banks' Business With Pot Shops

Drug cartels are already trying to take advantage of the Obama
administration's new rules allowing banks to do business with
marijuana shops in Colorado and Washington, a top Drug Enforcement
Administration official testified to Congress on Tuesday.

Thomas M. Harrigan, the agency's deputy administrator, also said DEA
is seeing signs that Mexican cartels are working to increase the level
of THC, the main active ingredient in marijuana, to keep up with
home-grown American product. He also said domestic production is on
the rise.

Testifying to a House subcommittee, Mr. Harrigan gave a glimpse of
some of the changes in marijuana trafficking since the two states'
legalization. He said he couldn't go into details because
investigations are ongoing, but said they've already seen signs that
gangs are "attempting to exploit" the new banking rules, which the
Treasury Department announced three weeks ago.

"Cash, as you very well know, is the driving force for these
drug-trafficking organizations," he told the House oversight
committee's government operations subcommittee. "Drug trafficking
organizations aren't particularly in the business to traffic drugs.
They're in the business to make money."

The federal government continues to grapple with the growing
inconsistencies in laws on marijuana. Colorado and Washington have
legalized personal recreational use and a number of other states
recognizing medicinal use with a doctor's prescription, but it remains
illegal in most states and under federal law.

John Walsh, the U.S. attorney for Colorado, said the challenge for
federal officials is to figure out standards that allow them to
enforce federal law uniformly across states that have different laws.

He said that's why the Obama Justice Department has outlined
enforcement priorities such as keeping marijuana out of the hands of
children and preventing cartels from being involved in the trade.

The Treasury Department, meanwhile, issued new rules that gave banks a
green light to do business with marijuana shops, in a move that state
officials hoped would ease the dangers of businesses holding so much

"The conflict and the chaos in policy is becoming even wider-spread
here," said Rep. John Mica, the Florida Republican who is chairman of
the government operations subcommittee.

The DEA was unable to say how much of its enforcement efforts are
concentrated on marijuana versus other drugs. Mr. Harrigan said most
criminal organizations don't limit themselves just to marijuana, so it
would be difficult to separate out those operations.

He also said his agency's operations in Colorado and Washington
haven't changed much since those states legalized personal use, since
the DEA generally only targets major criminal operations, and those
remain a priority for federal officials.

Mr. Harrigan got into a dispute with Democrats on the panel when he
said he supports having marijuana classified as a Schedule I
controlled substance, pointing to emergency room visits and high
levels of gang activity that surround the drug's use and

"You haven't kept up with society, you haven't kept up with science,"
Rep. Steve Cohen, Tennessee Democrat, told Mr. Harrigan.

Rep. Earl Blumenauer, an Oregon Democrat, said there was a difference
between marijuana and other drugs such as heroin: "Marijuana doesn't
appear to be killing people."

Rep. Thomas Massie, a Kentucky Republican, wondered whether the Obama
administration would stop enforcing federal laws on industrial hemp,
which resembles marijuana, but contains almost no THC. A number of
states, including Kentucky, want to be able to grow industrial hemp
for its many economic uses.

Mr. Harrigan said the administration is revisiting its industrial hemp
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