U.S. Sen. Elizabeth Warren (D-MA) is working to allow businesses and vendors dealing with legal marijuana to use banks and other traditional investment options. As silly as it sounds, currently businesses in states with medical or adult use cannabis provisions are forbidden from banking which keeps billions of dollars out of the economy and in the underground.
The legal cannabis industry, estimated to generate up to $7 billion annually, is forced to stash, bury or otherwise protect their profits. Many pay big bucks to hire security to keep their big bucks safe.
Warren joined nine other senators in sending a letter to the Financial Crimes Enforcement Network, after Massachusetts voters approved the recreational use of cannabis, calling on the agency to issue guidance to help banks provide services to marijuana shop vendors. The problem is that the federal government still classifies marijuana as Schedule 1 under the Controlled Substances Act and banks are afraid to touch money perceived as having been earned unlawfully.
Twenty-eight states have legalized marijuana for medicinal or recreational use. 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 told the Associated Press. “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 for the Financial Crimes Enforcement Network said the agency is reviewing the letter.
Two years ago, the U.S. 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 rose from 51 in 2014 to 301 in 2016. Warren said fewer than 3 percent of the nation’s 12,000 federally regulated banks and credit unions serve the cannabis industry.