WASHINGTON — The Obama administration on Friday gave the banking industry the green light to finance and do business with legal marijuana sellers, a move that could further legitimize the burgeoning industry.
For the first time, legal distributors will be able to secure loans and set up checking and savings accounts with major banks that have largely steered clear of those businesses. The decision eliminates a key hurdle facing marijuana sellers, who can now legally conduct business in 20 states and the District of Columbia.
So far, the Obama administration has dealt with the legal dilemmas posed by Colorado and Washington state — where state laws now allow recreational marijuana use — largely by choosing not to enforce the federal statutes. Eighteen other states allow the sale of medical marijuana — though federal law does not allow that, either.
Last year, for example, the administration said it would not challenge Colorado's and Washington's legalization of the drug, as long as they kept a tight rein on marijuana businesses. The administration agreed in August not to prosecute legal dealers as long as they met eight requirements, including not selling to minors.
This was not, federal officials said, a change in the law itself. Marijuana was still illegal, as far as the federal government was concerned, in all 50 states. Instead, it was just a declaration that the Justice Department had bigger things to worry about.
On Friday, the administration went a step further by laying out a path for banks to bring marijuana commerce out of the shadows and into the mainstream financial system.
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 August guidelines.
Financial institutions have feared that they would run afoul of money laundering statutes by accepting money from an activity considered illegal under federal laws. That has made it difficult for the growing crop of legal marijuana dispensers who must operate exclusively in cash, placing them at greater risk of being robbed.
Financial firms could be handsomely rewarded for banking legal marijuana business. The legal U.S. industry is expected to reach $2.57 billion in sales this year, according to ArcView Market Research.