In yet another example of America’s weird double standard when it comes to medical marijuana — which is now legal in 14 states — legitimate medical cannabis providers have been denied banking services or even had their existing accounts terminated, just for being involved in the medical marijuana business.
Fifteen members of Congress sent a letter Friday to Treasury Secretary Timothy Geithner urging him to issue “written guidance for financial institutions,” which would commit the Department to not targeting institutions whose account holders are in compliance with state medical marijuana laws.
The patient advocate group Americans for Safe Access (ASA
) said it has received “dozens of reports” over the past couple of years from medical marijuana providers in California, Colorado and other states who have either been denied financial services or even had their existing bank accounts terminated with little or no justification.
“It seems clear that legitimate state-run businesses are being denied access to banking services, which does not serve the public interest,” said the letter [PDF], authored by Colorado Congressman Jared Polis (D-CO), with whom ASA has been working to bring this issue to the attention of Treasury.
The Congressional letter, co-signed by Representatives from Arizona, California, Massachusetts, New Jersey, New York, Tennessee, Texas, and Wisconsin, said the denial of financial services produces “an increased risk to public safety with potential theft or robbery that any cash-only or cash-reliant business faces,” and is “an affront to fundamental fairness.”
Some federal prosecutions of medical marijuana cases have included the charge of “money laundering,” which according to the government can mean nothing more sinister than simply depositing proceeds from a dispensary into a bank account.
However, multiple states now expect medical marijuana dispensaries (and, by extension, patients) to pay sales tax.
|Caryn Woodson, ASA: “While financial institutions may have valid concerns, the risk to banks is minimal”
”While financial institutions may have valid concerns, the risk to banks is minimal,” said ASA Government Affairs Director Caren Woodson, “whereas their refusal to work with state-compliant medical marijuana providers jeopardizes countless people and delegitimizes lawful businesses.”
ASA said it had received reports over the past two years that financial institutions such as Bank of America, US Bank, Wells Fargo and Chase have either refused to work with medical marijuana suppliers altogether, or more specifically, refused to provide credit card transaction services.
Chase refuses to do business with dispensaries due to “financial, operational and compliance risk,” claimed spokesperson Gary Kishner, but he was strangely unable to explain to Boulder Weekly what that meant.
Chase had already incurred the wrath of marijuana supporters by its clumsy handling of fund-raising contest last year. Pot advocates called for a boycott
of the banking giant for the way it conducted an online contest to award millions of dollars to 100 charities.
At least three nonprofit groups, including Students for Sensible Drug Policy and the Marijuana Policy Project, said they believe that Chase disqualified them over concerns about associating its name with their missions.
ASA estimates that the widespread financial obstruction of dispensaries by financial institutions has directly impacted hundreds of dispensaries in multiple states.
Although the U.S. Justice Department in October 2009 issued its own guidance
on enforcement of marijuana laws in states where medical marijuana is legal, this policy shift so far apparently hasn’t quelled fears within the banking industry.
“Americans for Safe Access is working with Congress to obtain a Treasury policy similar to that of the DOJ,” said Woodson.
“We appreciate the leadership of Representative Polis and others as we attempt to remove federal obstacles from the implementation of safe access to medical marijuana at the local and state levels,” Woodson said.