Attorneys representing medical marijuana dealers are hoping new “guidance” Friday by federal officials paves the way for their clients to finally have bank accounts.
Ryan Hurley and Jeffrey Kaufman applauded the memo from the U.S. Department of Treasury telling financial institutions that allowing those who legally sell marijuana in their home states will not necessarily get them in trouble even though possession and sale of the drug remains a felony under federal law. Instead, the memo provides what the federal agency calls “guidance,” which “clarifies how financial institutions can provide services to marijuana-related businesses” consistent with other federal regulations.
“We're hopeful that it means we'll have bank accounts very soon that aren't going to get shut down,” said Hurley.
He acknowledged that nothing in the memo requires banks to accept such accounts. In fact, it says that banks should assess the risk of doing business with dispensaries, looking at issues including whether the business is licensed and whether the clients are medical patients or recreational users.
And it says banks should monitor for “suspicious activity.”
“But the memo and the guidance gives them a path to compliance if they so choose to take it,” Hurley said.
Kaufman called the memo “wonderful.”
“I would hope that the banks go along with it,” he said. He said that banks should see this as a wonderful business opportunity to handle millions of dollars of transactions that are processed through the state's nearly 100 dispensaries.
“If I were a bank, I would immediately start accepting medical marijuana dispensaries as clients,” Kaufman said. “Because the first one that does will end up representing all.”
“My gut is that smaller regional and community banks will see this as a huge opportunity and will probably get into the space before the large ones do,” Hurley agreed.
He said that some of his clients have had bank account, but Hurley said they never seem to last.
“Usually what will happen is they'll be told by a branch manager or somebody at the local or regional level even that they're fine with it,” Hurley said.
“And once they start making a whole bunch of cash deposits, they get a letter from the national bank saying that their account is under review,” he continued. “And a few weeks later they get shut down.”
In a press release with the guidance memo, the federal agency says it is “providing clarity” which “should enhance the availability of financial services for marijuana businesses.” But it also says having the proceeds from legal sales run through banks means greater transparency for what's largely an all-cash business and could help law enforcement keep a closer eye on operations.