By Aaron Klein
In Oregon and other states where medical or recreational marijuana is legal, it’s no secret that dispensary owners continue to face a host of operational hurdles, including a reluctance by banks to do business with them. Owners rightly complain about the safety risks of operating lucrative businesses in cash, not to mention the logistical hurdles of paying employees, other businesses and even their taxes.
Most arguments to resolve this mess have focused on regulation impacting marijuana-related businesses. This misses a major source of the problem: anti-money laundering regulation on banks. Nonsensical bank regulation is harming almost everyone: the federal government, state governments, banks and increasingly other businesses that just happen to interact with marijuana firms. There is a simple solution, if only bank regulators, the Treasury Department, and Congress, had the courage to admit the obvious: We don’t need anti-money laundering rules to find state-licensed marijuana businesses.
The complex web of federal regulations that deter banks from working with legal dispensaries starts with the federal government requiring banks and financial firms to file “suspicious activity reports” that help federal investigators detect and uncover criminal enterprises. But when it comes to state-licensed marijuana dispensaries, these reports stop making sense. The purpose of these reports is to help law enforcement identify criminal activity and be able to follow the money