Pubdate: Tue, 03 Jan 2017
Source: Boston Globe (MA)
Copyright: 2017 Globe Newspaper Company


Senator Elizabeth Warren is leading a new effort to make sure vendors
working with marijuana businesses don't have their banking services taken

As marijuana shops sprout in states that have legalized the drug, they
face a critical stumbling block: lack of access to the kind of routine
banking services other businesses take for granted.

US Senator Elizabeth Warren, a Massachusetts Democrat, is leading an
effort to make sure vendors working with legal marijuana businesses, from
chemists who test marijuana for harmful substances to firms that provide
security, don't have their banking services taken away.

It's part of a wider effort by Warren and others to bring the burgeoning
$7 billion marijuana industry in from a fiscal limbo she said forces many
shops to rely on cash, making them tempting targets for criminals.

After voters in Warren's home state approved a November ballot question to
legalize recreational use of pot, she joined nine other senators in
sending a letter to a federal regulator, the Financial Crimes Enforcement
Network, calling on it to issue additional guidance to help banks provide
services to marijuana shop vendors.

Twenty-eight states have legalized marijuana for medicinal or recreational

Warren, a member of the Senate Banking Committee, said there are benefits
to letting marijuana-based businesses move away from a cash-only model.

''You make sure that people are really paying their taxes. You know that
the money is not being diverted to some kind of criminal enterprise,''
Warren said recently. ''And it's just a plain old safety issue. You don't
want people walking in with guns and masks and saying, 'Give me all your
cash.' ''

A spokesman said the Financial Crimes Enforcement Network is reviewing the

Two years ago, the Department of the Treasury gave banks permission to do
business with legal marijuana entities under some conditions. Since then,
the number of banks and credit unions willing to handle pot money has
risen from 51 in 2014 to 301 in 2016.

Warren, however, said fewer than 3 percent of the nation's 11,954
federally regulated banks and credit unions are serving the cannabis

Taylor West, deputy director of the National Cannabis Industry
Association, a trade organization for 1,100 marijuana businesses
nationwide, said access to banking remains a top concern.

''What the industry needs is a sustainable solution that services the
entire industry instead of tinkering around the edges,'' Taylor said.
''You don't have to be fully in favor of legalized marijuana to know that
it helps no one to force these businesses outside the banking system.''

Sam Kamin, a professor at the University of Denver Sturm College of Law,
said there's only so much states can do on their own. ''The stumbling
block over and over again is the federal illegality,'' he said.

The federal government lumps marijuana into the same class of drugs as
heroin, LSD, and peyote. Democratic President Barack Obama's
administration has essentially turned a blind eye to state laws legalizing
the drug, and supporters of legalizing marijuana hope Republican
President-elect Donald Trump will follow suit.

Trump officials did not respond to a request for comment. During the
presidential campaign, Trump said states should be allowed to legalize
marijuana and he has expressed support for medicinal use. But he also has
sounded more skeptical about recreational use, and his pick for attorney
general, Alabama Senator Jeff Sessions, is a stern critic.

Some people in the marijuana industry say the banking challenges are
merely growing pains for an industry evolving from mom-and-pop outlets.

Nicholas Vita, chief executive of Columbia Care, one of the largest
providers of medical marijuana products, said it's up to marijuana
businesses to make sure their financial house is in order.

''It's not just as simple as asking the banks to open their doors,'' Vita
said. ''The industry also needs to develop a set of standards that are
acceptable to the banks.''
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