In what is probably another big move forward in the fight for the legalization of marijuana, the federal government last Friday made a serious announcement that I am sure will be music to the ears of many marijuana business owners. The federal government announced new guidelines that would allow banks to provide services to marijuana businesses.
So what does this mean? Well, for starters, it means that marijuana business owners are slowly starting to get social acceptance. The stigma toward the herb is slowly dying out as more and more people get more knowledgeable on how beneficial it really can be. This announcement which was made by the division of the U.S. Treasury the Financial Crimes Enforcement Network (FinCEN) said the move will “promote greater financial transparency in the marijuana industry and mitigate the dangers associated with conducting an all-cash business.”
This memo which is an official acknowledgement of the legitimacy of marijuana retailers will no doubt help to increase the availability of banking options for pot business owners. That said, if you are a marijuana retailer, you will still need to pass a number of checks before you can get access to the services you need.
In particular, the banks will still have to verify and review your marijuana license to operate, do background checks to see if your business might be involved in any illegal activities and consistently monitor public resource information on your business for detailed specifics of the business and its related activities.
That said, not everyone thinks the move was good. Frank Keating President and CEO of the American Bankers Association was quoted as saying the new guidelines were not a solution.
“While we appreciate the efforts by the Department of Justice and FinCEN, guidance or regulation doesn’t alter the underlying challenge for banks,”
“As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.”
So I ask you. Was treasury through FinCep right to issue these guidelines or was this the wrong move? Personally, for the industry I think it was the right move and the ripple effect could well spill into other sectors of the economy, however it will take a lot of convincing on the mainstream public.