A close-up look at Forbidden Farms' marijuana growing operation in Shelton and the processing facility on the Tacoma Tideflats. Owned by the Balduff brothers Garrett and Taylor, the premium producer even supplies cannabis connoisseur Willie Nelson. Steve Bloom and Drew Perine sbloom@theolympian.com, dperine@thenewstribune.com
A close-up look at Forbidden Farms' marijuana growing operation in Shelton and the processing facility on the Tacoma Tideflats. Owned by the Balduff brothers Garrett and Taylor, the premium producer even supplies cannabis connoisseur Willie Nelson. Steve Bloom and Drew Perine sbloom@theolympian.com, dperine@thenewstribune.com

Marijuana

Senators say all-cash marijuana shops pose a danger for vendors

December 15, 2016 11:28 AM

UPDATED December 17, 2016 10:08 AM

WASHINGTON

There’s a whole lot of cash sitting in marijuana shops in Washington state, Colorado and elsewhere, with less than 3 percent of the nation’s banks and credit unions willing to do business with them.

With another eight states voting last month to expand access to legal marijuana, the number of all-cash businesses will balloon in coming years.

And with another eight states voting last month to expand access to legal marijuana, the number of all-cash businesses will balloon in coming years.

301 The number of the 11,954 federally regulated banks and credit unions that have chosen to serve marijuana businesses so far

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While the issue has long been a concern for pot growers and sellers, Washington state Democratic Sen. Patty Murray and nine other U.S. senators now say the lack of access to banking services is harmful to vendors who work with marijuana businesses, too.

This long list of professionals includes chemists who have had their checking accounts closed due to their role in testing marijuana for the presence of harmful materials like arsenic, the security industry --- which marijuana businesses heavily rely on due to the massive amounts of cash they handle, and lawyers offering legal services to marijuana businesses, who have reported banks denying applications for bank accounts and credit cards.

Sen. Patty Murray, D-Wash., and nine other senators in a etter to the U.S. Treasury Department’s Financial Crimes Enforcement Network

“This long list of professionals includes chemists who have had their checking accounts closed due to their role in testing marijuana for the presence of harmful materials like arsenic, the security industry – which marijuana businesses heavily rely on due to the massive amounts of cash they handle, and lawyers offering legal services to marijuana businesses, who have reported banks denying applications for bank accounts and credit cards,” the senators wrote in a letter to the U.S. Treasury Department’s Financial Crimes Enforcement Network.

In the letter, the senators complained that the issue is “creating huge logistical and safety problems for communities across the country,” with the all-cash pot businesses “a huge target for criminals.”

In 2014, the Obama administration advised U.S. attorneys in states where the sale of marijuana is legal not to prosecute banks that allow pot stores to open accounts and accept credit card payments.

But with marijuana still banned by Congress, most have been unwilling to take the risk, knowing the rules could easily change with a new president.

According to Murray and the other senators, only 301 of the 11,954 federally regulated banks and credit unions have chosen to serve marijuana businesses so far.

And the senators said the Obama administration’s guidance to prosecuting attorneys did not distinguish between state-sanctioned businesses and vendors that want to provide services to them.

Without access to federal banking services, the senators said the current business environment for the rapidly growing U.S. marijuana industry and its vendors has become “an invitation to tax fraud, robberies and organized crime.”

The nine others who signed the letter were: Democratic Sens. Jeff Merkley and Ron Wyden of Oregon, Kirsten Gillibrand of New York, Elizabeth Warren of Massachusetts, Al Franken of Minnesota, Cory Booker of New Jersey, Independent Sens. Bernie Sanders of Vermont and Angus King of Maine and Republican Sen. Lisa Murkowski of Alaska.

Rob Hotakainen: 202-383-6154, @HotakainenRob