The U.S. Department of Justice presented some support this week that the argument among banking system and pot businesses could be resolved. Anyone who cares about public safety should expect the organization succeeds.
The Justice Department, which before had signaled that banks that dealt with marijuana businesses would be in violation of federal law, is now suggesting there may be ways to work with banking regulators on the issue without having to get congressional approval.
Testifying before the U.S. Senate Judiciary Committee on Tuesday, Deputy Attorney General James Cole said Justice Department officials are working with the Treasury Department on "ways that this can be dealt with in accordance with the laws that we have on the books today."
Here is the problem: Federal law bars banks from doing business with criminal organizations, and while medical marijuana is legal in Colorado and recreational sales will be legal in January, the drug is still illegal under federal law.
Thus, pot shops and related businesses have been prohibited from taking credit cards or checks. They can accept only cash, which they can't put into bank accounts. Marijuana-related enterprises also pay their taxes in cash and complain they can't even hire armored cars because of federal laws.
The whole situation sets up an enormous public safety problem, especially in Denver as January approaches. With large amounts of cash exchanging hands continually, the 200 or so pot shops in Denver will make tempting targets for armed robbers.
The large and steady flow of cash also could be tempting for organized crime groups that want to launder money through marijuana businesses. And the cash-only system hampers auditors being able to square sales with inventory or to see if taxes are really being paid.
It possible, the federal government should craft a solution that brings these transactions onto the books and into the banks.
The Justice Department, which before had signaled that banks that dealt with marijuana businesses would be in violation of federal law, is now suggesting there may be ways to work with banking regulators on the issue without having to get congressional approval.
Testifying before the U.S. Senate Judiciary Committee on Tuesday, Deputy Attorney General James Cole said Justice Department officials are working with the Treasury Department on "ways that this can be dealt with in accordance with the laws that we have on the books today."
Here is the problem: Federal law bars banks from doing business with criminal organizations, and while medical marijuana is legal in Colorado and recreational sales will be legal in January, the drug is still illegal under federal law.
Thus, pot shops and related businesses have been prohibited from taking credit cards or checks. They can accept only cash, which they can't put into bank accounts. Marijuana-related enterprises also pay their taxes in cash and complain they can't even hire armored cars because of federal laws.
The whole situation sets up an enormous public safety problem, especially in Denver as January approaches. With large amounts of cash exchanging hands continually, the 200 or so pot shops in Denver will make tempting targets for armed robbers.
The large and steady flow of cash also could be tempting for organized crime groups that want to launder money through marijuana businesses. And the cash-only system hampers auditors being able to square sales with inventory or to see if taxes are really being paid.
It possible, the federal government should craft a solution that brings these transactions onto the books and into the banks.
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