Financial Institutions Get Hollow Permission From Obama Administration To Open Accounts For Pot Shops

The “Obama administration on Friday gave the banking industry the green light to finance and do business with” marijuana sellers in compliance with state law even if otherwise violating federal law as reported by Danielle Douglas for The Washington Post:

The Treasury Department issued new rules that could make it easier for banks to do business with marijuana dispensers. In separate guidance, the Justice Department directed U.S. attorneys not to pursue banks that do business with legal marijuana dispensers as long as the dealers adhere to the guidelines issued in August.

Financial institutions which conduct business with the pot shops proceed at their own risk.

The newly-issued guidance memoranda merely reflect the Obama administration’s own prosecutorial discretion not to enforce existing law, and they will not provide a legal defense or safe harbor for the banks if future administrations prosecute them as Sen. Chuck Grassley, ranking member of the Senate Judiciary Committee, warned in a statement:

“Marijuana trafficking is illegal under federal law, and it’s illegal for banks to deal with marijuana sale proceeds under federal law. Only Congress can change these laws. The administration can’t change the law with a memo.”

Indeed, in Colorado where the wacky weed is legal under state law, the Bankers Association “has been vocal about its concerns and has been clear that a guidance alone won’t address the discomfort to banks of opening such accounts” as reported by Karen Weise for Businessweek:  “in opinion columns and other press comments, the banking mantra has been that only an act of Congress will suffice.”

Meanwhile, “an ongoing federal investigation is raising questions about the Colorado marijuana industry’s ties to illegal drug operations” as reported by Will Ripley for KUSA-TV:

Widespread raids on Nov. 21 targeted more than a dozen dispensaries, warehouses, homes and grow operations. Agents are gathering evidence to prove Colombian drug cartels are coming to the state and are using the front of legal marijuana to make money illegally.

Of course, drug legalization can’t eliminate organized crime.

For example, the Mafia continued well after the repeal of Prohibition to have a heavy hand in the bar trade by using clean names as business fronts.

The drug cartels have made billions in their illicit trade, and will not readily abandon their lucrative ventures to make room for the honest brokers under a legalized system.