reuters | Financial institutions across the country still face legal
risks if they do business with marijuana shops because pot
remains illegal under federal law.
"If financial institutions are federally licensed or
insured, they must comply with federal regulations, and those
regulations are clear about conducting financial transactions
with money generated by the sale of narcotics," said Jim
Dowling, a former Internal Revenue Service special agent who
also acted as an anti-money laundering advisor to the Office of
National Drug Control Policy.
The ballot measures on Tuesday made Colorado and Washington
the first states to permit recreational marijuana sale and use.
Medical-marijuana laws have been around in some states for more
than a decade.
California was the first state to legalize medical marijuana
in 1996. With the addition of Massachusetts, which passed a
medical-marijuana ballot initiative on Tuesday, 18 states and
the District of Columbia now have such laws on their books.
The medical marijuana business was worth $1.7 billion in
2011 and growing, according to a study by financial-analysis
firm See Change Strategy.
The federal government does not recognize states' authority
to legalize marijuana under any circumstances, however. It has
targeted some medical-pot businesses for violations of the
40-year-old Controlled Substances Act, which classifies the drug
a Schedule 1 narcotic, meaning it is considered addictive and
with no medical value.
The Justice Department on Wednesday said its marijuana
enforcement policies remained unchanged. "We are reviewing the
ballot initiatives and have no additional comment at this time,"
its public statement said.
A Justice Department spokeswoman did not respond to a
request for additional comment related to banking activity.
