Senator Bob Hasegawa of Seattle has proposed a solution to the cash-only economy that medical (and soon recreational) marijuana companies have existed in since its legalization: a state-run bank designed and constructed solely to handle all of the controversial industry’s revenues.
In general, banking and cannabis simply do not coincide in today’s world of shifting drug policies and public opinion. As the drug is still federally listed as a schedule 1 narcotic, banks – fearing accusations of money laundering by the federal government – simply won’t risk doing business with anything or anyone marijuana-related (medical or otherwise). This has been a serious issue since Washington legalized medicinal marijuana in 1998, and with recreational stores slotted to open sometime later this year, Sen. Hasegawa believes it’s time to finally do something about it.
Hasegawa’s proposed bill would supposedly establish a “financing structure to implement Initiative Measure No. 502 that complies with the United States attorney general’s guidance letter of August 29, 2013, thereby providing resources for public infrastructure and other public purposes.” The senator acknowledges that the bill’s passing is unexpected, but he maintains that “the only alternative right now is cash-based, which is totally unacceptable and cannot adhere to the attorney general’s guidelines because it can’t track every last dollar.”
He also believes that the introduction of I-502 might simply be the best opportunity for creating a state-owned and state-run bank, a concept which has grown popular since the Occupy Wall Street movement as a means of keeping capital within reach of a broader population. Sen. Hasegawa also claims that creating this bank is the only current option that will allow cannabusinesses to deposit money without worrying about the federal government seizing their assets. By encouraging marijuana companies to do their banking through the state-run project, Washington could hope to alleviate some of the difficulties of launching a new bank.
There are, however, those who believe that a marijuana-dedicated, state-run bank is an impossible feat. Don Childears, president and CEO of the Colorado Bankers Association, argues that “in short, federal law says any entity that holds deposits from another person, transfers funds between parties as in checks, debit cards, wire transfers, or otherwise is connected to the payments system — the movement of money from one financial entity to another party — must abide by federal law.” Therefore, it’s not an issue of whether or not Washington’s hypothetical bank would be able to accept cash deposits from marijuana businesses, rather that said businesses simply would not have any of the advantages normally associated with having a bank account. Cash deposits into a large, secure bank vault is one thing – actually having a checkbook or credit card associated with the money in that vault is something entirely different: it’s something monitored and controlled by the federal government.
Hasegawa’s bill is being opposed by the banking community, bond brokers, and the state’s treasurer, but he is still determined to have a public discussion about the benefits and drawbacks of implementing such a system. “It has drawn the debate away from the detractors of the other arguments,” he says, and its opposition has now “focused on the illegality of marijuana itself.”
It would seem that Washington voters are simply more inclined to throw federal policy on marijuana out the window than its legislators, who continue to tiptoe around federal regulations and expectations. It’s as if everyone thinks Hasegawa’s plan would be excellent if it weren’t still federally illegal… but isn’t that what I-502 has always been about?
Photo Credit: H. Barrison