An important hearing is taking place in Denver this week in a federal court. There, the Fourth Corner Credit Union, established by Colorado to accept cash from cannabis businesses, has sued the US Federal Reserve. Why? Because the Fed said they can’t take cannabis cash and the bank needs the Fed’s approval to operate. Even though the Treasury Department issued guidelines for how federally chartered banks can accept money from state-legal cannabis dealers, the Fed, which wants Fourth Corner’s case dismissed, has now said firmly that no bank should be allowed to accept one penny from these sellers.
In their court filing in Denver, they said it would be the same as if a state passed a law making trading in endangered species or doing business with North Korea legal and then tried to allow banks to accept cash from that. And that the federal law here trumps state, period.
As of now, over one hundred banks and credit unions have been accepting cannabis cash under the Treasury guidelines which were issued in 2014. They’re not the best, but they direct prosecutors to give priority to prosecution of banks only if they don’t follow the guidelines. Initially hesitant, more and more banks cannot resist the opportunity to benefit from the rapidly growing industry. Many banks are offering deposit accounts and check writing, but still not permitting credit cards or loans to these businesses. There is also an enterprising Native American who has announced a plan to open a bunch of banks on their reservations with less US federal oversight, as noted previously here.
I just watched a two year-old episode of the Showtime show Ray Donovan, which includes a heist to steal a vault from a medical marijuana dispensary in California. Maybe two years from now that will seem anachronistic if the federal reserve comes in line with the federal government to back off those seeking to help so many with serious illnesses alleviate their pain, tremors, effects of chemotherapy and so much more as so brilliantly outlined by Dr. Sanjay Gupta in his series on cannabis on CNN. Not to mention allowing law-abiding citizens the freedom to enjoy cannabis just like the Fed governors take their glass of wine at the end of the day.
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