Economy

Holder: US will adjust banking rules for marijuana

News comes as Texas Gov. Rick Perry announces he will support policies that favor marijuana decriminalization

Attorney General Eric Holder speaking at the University of Virginia in Charlottesville, Jan. 23, 2014.
Ryan M. Kelly/The Daily Progress/AP

Attorney General Eric Holder said Thursday that the Obama administration plans to roll out regulations soon that would allow banks to do business with legal marijuana sellers.

During an appearance at the University of Virginia, Holder said it is important from a law-enforcement perspective to give legal marijuana dispensaries access to the banking system so they don't have large amounts of cash lying around.

Currently, processing money from marijuana sales puts federally insured banks at risk of racketeering charges. Because of the threat of criminal prosecution, financial institutions often refuse to let marijuana-related businesses open accounts.

The issue has taken on urgency now that Colorado and Washington have become the first states to legalize recreational use of marijuana. And medical marijuana dispensaries in other states have also had to buy inventory, pay employees and conduct sales entirely in cash — putting them at a high risk of robbery.

"You don't want just huge amounts of cash in these places," Holder told the audience at the University of Virginia. "They want to be able to use the banking system. And so we will be issuing some regulations I think very soon to deal with that issue."

Colorado this month became the first state to open retail outlets legally permitted to sell marijuana to adults for recreational purposes, in a system similar to what many states have long had in place for alcohol sales.

Washington state is slated to launch its own marijuana retail network later this year, and several other states, including California, Oregon and Alaska, are expected to consider legalizing marijuana for recreational use in 2014.

The number of states approving marijuana for medical purposes has also been growing. California was the first in 1996, followed by about 20 other states and the District of Columbia.

But the fledgling recreational-pot markets in Colorado and Washington state have sent a new wave of cannabis proprietors clamoring to obtain loans and make deposits in banks and credit unions.

The Justice Department announced in August that the administration would give new latitude to states to experiment with the taxation and regulation of marijuana.

"This is yet another indication that the Obama administration really is trying to act in good faith with respect to Colorado and Washington's efforts to regulate marijuana in a responsible way," Ethan Nadelmann, executive director of the Drug Policy Alliance, said in a statement.

Holder did not offer any specifics on a timeline for action on banking services for marijuana. 

Critics of liberalized marijuana laws have said the lack of credit faced by pot retailers was beside the point.

"We are in the midst of creating a corporate, for-profit marijuana industry that has to rely on addiction for profit, and that's a much bigger issue than whether these stores take American Express," Kevin Sabet, a co-founder of the anti-legalization group Smart Approaches to Marijuana, told Reuters.

Texas Gov. Rick Perry, meanwhile, defended marijuana legalization in Colorado and Washington during a speech Thursday at the World Economic Forum in Switzerland. He said legalization was an issue of states' rights and touted Texas initiatives as national models for keeping minor drug offenders out of jail, according to U.S. News and World Report.

Perry said he would support marijuana decriminalization in Texas. But he said that he couldn't see Texas' legalizing pot anytime soon.

"We certainly would never jump out in front of the parade," he told the magazine.

Al Jazeera and wire services

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