Pubdate: Wed, 11 Sep 2013
Source: Denver Post (CO)
Copyright: 2013 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: John Ingold
Page: 5A

FEDS TO REMOVE HURDLES TO POT LEGALIZATION

The U.S. Department of Justice is working to find a way for marijuana 
businesses to have bank accounts, the second major signal in a week 
that the federal government is willing to give marijuana legalization 
in Colorado a chance to succeed.

Testifying on Tuesday before a U.S. Senate committee, Deputy U.S. 
Attorney General James Cole said Justice Department officials are in 
talks with officials from the Treasury Department on the marijuana 
industry's banking riddle. Federal law currently makes banks 
unwilling to work with marijuana businesses. Cole said the talks are 
focused on "ways that this can be dealt with in accordance with the 
laws that we have on the books today."

"We agree that it is an issue we need to deal with," Cole said.

Cole's comments continue the federal government's remarkable rapid 
shift on the marijuana industry. Last week, Cole wrote a memo that 
said the federal government does not intend to prosecute marijuana 
businesses that are playing by strict state rules, even though the 
businesses remain illegal under federal law. Cole re-iterated that 
policy on Tuesday.

By also addressing the industry's banking problems, the federal 
government will have removed two main problems confronting pot 
entrepreneurs: the threat of going to jail and the dilemma of where 
to put the money.

"We have every reason to believe they will take action on banking 
sooner rather than later," said Betty Aldworth, a spokeswoman for the 
National Cannabis Industry Association.

Because federal law forbids banks from taking the business of 
criminal organizations, marijuana businesses have for years struggled 
to obtain bank accounts or credit card processing. That means many 
dispensaries operate as cash only - installing large safes in their 
shops and paying taxes in envelopes stuffed with cash. And it is a 
significant concern for officials in Colorado and Washington state 
who are preparing for recreational marijuana industries voters 
authorized in November.

Marijuana advocates say the situation makes dispensaries a target for 
crime, while regulators say it makes auditing them difficult.

"It would be so much easier to audit the books, make sure taxes are 
being paid, make sure stores are following the rules we put in place 
if they are able to work with banks," Jack Finlaw, Gov. John 
Hickenlooper's chief legal counsel, told the committee.

Iowa Sen. Chuck Grassley, though, was skeptical that state 
regulations will be able to control marijuana, regardless of federal 
policy. Grassley cited audits of Colorado's medical-marijuana 
enforcement that found problems monitoring dispensaries.

"Why has the department decided to trust Colorado to regulate 
recreational marijuana when it has already failed to effectively 
regulate medical marijuana?" Grassley, a Republican, asked.

But Cole said the federal government has limited options. Even if the 
Justice Department shut down the state's forthcoming recreational 
marijuana stores, it could not overturn the new law that makes adult 
use and possession of marijuana legal. All that legal demand would be 
a boost to illegal suppliers, Cole said.

"There are no perfect solutions here," Cole said. "If we just went 
after their regulatory scheme, instead of just having a bad one, they 
would have no regulatory scheme."
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MAP posted-by: Jay Bergstrom