By John Geluardi
As the California campaign for the Adult Use of Marijuana Act gains momentum and state economists forecast an industry that could grow to $15 billion annually by 2020, creating thousands of jobs and generating millions in tax revenue, there’s a dark cloud hanging over potential victory celebrations on Nov. 8: The multibillion dollar industry will have no legal banking options.
If approved by voters, new cannabis businesses in California will have to overcome an obstacle that has dogged the industry in 25 medical marijuana states and four recreational-use states — Colorado, Oregon, Washington, and Alaska. There simply is no safe, efficient, and legal banking. The Attorney General’s Office made that very clear with the now infamous 2011 “Cole Memo,” which warned bankers not to open cannabis-related accounts or they could face money-laundering charges or possibly lose their FDIC insurance, which would be ruinous.
Oregon Sen. Jeff Merkley said the current cannabis banking laws are not only outdated, but they also inhibit reliable tax collection and create a business environment prone to crime and violence. Oregon’s estimated legal cannabis market is expected to bring in a half-billion dollars during its first 14 months, and Merkley said he is worried about the negative impact that poorly thought out federal banking regulations will have on cannabis employees and the community in general. “The federal government should not be forcing Oregon’s legal marijuana businesses to carry gym bags full of cash to pay their taxes, employees and bills,” Merkley says. “This is an invitation to robberies, money laundering, and organized crime.”