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AG Eric Holder says legal marijuana businesses should have bank access

Holder pledged the government would soon hand down stricter regulations in the industry

The legal marijuana industry may be becoming an increasingly attractive investment as prices in Colorado soar, but many investors and banks want to know how these companies will be regulated financially, before they get involved. Fortunately for them, according to U.S. Attorney General Eric Holder, the wait for marijuana regulation may not last much longer.

Speaking at the University of Virginia on Jan. 23, Holder said that lawful marijuana businesses should have access to the American banking system. He pledged that the government would soon hand down rules to govern this relationship as well. While these rules would likely not allow banks to accept direct deposits from marijuana companies they may tell prosecutors not to prioritize cases involving legitimate dealers.

“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Holder said according to The New York Times. “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.”

The statement comes after many investors have expressed fear at doing business with the industry because of unclear governmental regulations. Banks have been cautious as well, with Richard Riese, senior vice president for regulatory compliance at the American Bankers Association, telling the NYT that banks would need assurances that they would not be seen as “aiding and abetting” illegal enterprises by providing banking services.

“Banks will need a lot of detail from regulators to get the satisfaction and comfort they are looking for,” Riese said.

However, the federal government is beginning to see the need for increased oversight in this area. A Jan. 7 memo from the Department of Justice sought to clarify the risks and responsibilities of Colorado banks as marijuana laws loosened.

 

For more on the legal news surrounding the marijuana industry, check out these InsideCounsel articles:

Marijuana an increasingly attractive investment opportunity despite unclear financial regulations

DOJ memo hopes to offer financial firms more explicit guidelines on handling marijuana lucre

Marijuana prices skyrocket in Colorado with recreational purchase legalization

Labor: Medical marijuana law comes to Illinois

Contributing Author

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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