It’s time for banks to wade into the new “legal limbo” created by the recent regulatory changes set forth by the Obama administration. Designed to assuage prosecution-risk concerns, the new Justice Department guidelines seek to bring dispensaries, especially in California and Colorado, into the fold of the financial industry. The question is does the conflict between federal and state law make marijuana a viable capital investment. >>>>>>>>>
LA Times: Banks Get a Primer on Pot Money – February 14, 2014 – By Timothy M. Phelps and Jim Puzzanghera
WASHINGTON — The Obama administration, taking the first regulatory step to accommodate the country’s growing state-approved marijuana businesses, issued guidelines Friday designed to bring dispensaries into the banking system and end their risky reliance on stashing large amounts of cash.
The step was a cautious one, reflecting conflicting pressures on the administration.
On one side, many states now allow the sale of marijuana for medical or recreational use. Atty. Gen. Eric H. Holder Jr. said last month that law enforcement agencies were increasingly concerned about marijuana sellers who are forced to deal in cash because the banks’ unwillingness to deal with them prevents them from using credit cards.
At the same time, federal law still classifies marijuana as illegal, and many in law enforcement agencies have privately criticized the administration’s actions to rein in prosecutions.