Pubdate: Wed, 11 Sep 2013
Source: Durango Herald, The (CO)
Copyright: 2013 The Durango Herald
Contact: http://durangoherald.com/write_the_editor/
Website: http://durangoherald.com/
Details: http://www.mapinc.org/media/866
Author: Joe Hanel

OFFICIALS DOUBTED POT LAWSUIT WOULD SUCCEED

Marijuana Business Owners Still Have Problems Working With Banks

U.S. Justice Department leaders doubted that a lawsuit to overturn
marijuana legalization in Colorado and Washington state would succeed,
so they felt they had little choice than to accept the laws, a senior
official told the U.S. Senate Judiciary Committee on Tuesday.

Also at the hearing, Deputy Attorney General James Cole said his
department is working on a solution to the banking problem that is
plaguing marijuana businesses around the country. Because the drug is
still illegal under federal law, banks won't deal with pot shops,
forcing them to keep tens of thousands of dollars of cash on hand.

"Obviously, there is a public-safety concern when businesses have a
lot of cash laying around," Cole said.

Department of Justice officials are talking with bank regulators about
ways that banks could do business with marijuana shops using laws that
are on the books today, Cole said.

Cole signed the Justice Department memo last week that said federal
officials won't try to overturn the legalization laws in Colorado and
Washington - or target marijuana businesses for prosecution - as long
as the states had strict rules that businesses are following.

Federal goals are to keep marijuana away from children, confine it to
states where it is legal, and keep criminals out of the pot business,
Cole said.

But U.S. Sen. Charles Grassley, R-Iowa, hammered Colorado for its
failures to enforce medical marijuana regulations. He said about a
third of the marijuana in his state can be traced to Colorado.

Grassley also cited state audits that showed the Colorado Department
of Revenue botched its enforcement of medical marijuana businesses,
while the state health department has been lax about overseeing
doctors who recommend pot.

"Why has the department (of Justice) decided to trust Colorado to
effectively regulate recreational marijuana when it's already
struggling to regulate medical marijuana?" Grassley asked Cole.

Cole said the federal government probably wouldn't succeed in a
lawsuit that tried to force states to pass a law  in this case,
criminalization of marijuana. The next alternative was to target the
states' enforcement rules as a violation of federal law. But that
strategy has big problems, too.

"If we just went after their regulatory scheme, instead of having a
bad one, they'd have no regulatory scheme," Cole said.

Not everyone agrees. Kevin Sabet, who is a legalization critic and
director of the University of Florida Drug Policy Institute, argued in
favor of a federal crackdown on Colorado and Washington before more
states and businesses get into the pot industry.

"By threatening legal action, the administration can prevent the
large-scale commercialization and retail sales of marijuana," Sabet
said.

Jack Finlaw, Gov. John Hickenlooper's legal adviser, also testified
and said the main reason Colorado had such troubles with medical
marijuana is that it lacked the money to pay for inspectors. A tax on
the ballot this November should ensure the state has enough money to
police recreational pot, Finlaw said.
- ---
MAP posted-by: Matt