Colorado has legalized the sale and possession of marijuana, with Washington state soon to follow suit. But it’s still illegal under federal law. Which means that banks are not allowing companies that sell marijuana to open accounts, lest they violate federal laws and regulations. This means that the legalized marijuana industry is accumulating mountains of cash and storing it in warehouses. (A special dispensation allows for bank accounts to be opened for the sole purpose of paying taxes, so the government has that covered, at least.)
From Pots of marijuana cash cause security concerns:
The unmarked armored truck rumbles to a stop in a narrow alley, and former U.S. Marine Matthew Karr slides out, one hand holding a folder, the other hovering near the pistol holstered at his hip.
With efficient motions he retrieves a locked, leather-bound satchel from a safe set into the truck’s side and presses a buzzer outside the door. It swings open to reveal a cavernous warehouse filled with marijuana and a safe stuffed with cash.
Welcome to the rear guard of Colorado’s rapidly expanding legal marijuana industry, where eager users pour millions of dollars — most of it in small bills — into buying pot, hashish, and marijuana-infused foods and drinks. All that cash adds up, and there are few places to put it: Federal regulations, which still classify pot as an illegal drug, make it difficult for marijuana producers to deposit their profits into traditional bank accounts.
And those cash-heavy small businesses make awfully attractive — and vulnerable — targets for criminals. . . .
Unlike most other businesses, marijuana-store owners can’t easily open bank accounts for fear of running afoul of federal law. Despite Washington state joining Colorado last week in legalizing sales of marijuana for recreational purposes and 23 states plus the District of Columbia permitting medical pot, the federal government still classifies the plant as an illegal drug more dangerous than cocaine or methamphetamine.
By opening a bank account, pot growers and shop owners run the risk of being charged with money laundering, because federal banking laws and regulations are deliberately aimed at tracking large flows of cash like those generated by both legal and illegal drug sales. A single such charge can bring decades in prison, and most banks and pot-shop owners don’t want to run that risk.
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