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"In addition, the inability of cannabis operations to
get banking services means that many of them may
remain in the underground economy and not become
transparent, regulated, tax-paying businesses, as
California voters intended," Chiang wrote in a report
titled Banking Access Strategies for Cannabis-Related
Businesses.

Congress, states, press for reforms
For their part, state officials in Hawaii ordered medical
marijuana shops there to stop accepting cash in 2017.
The move, they said, was meant to "create a safer
environment" for dispensaries, their customers and
employees. Hawaii hired financial technology company
CanPay to deploy a mobile debit app that clears
dispensary payments through the ACH in compliance
with the 2014 DOJ and FinCEN guidance. But now, in
the wake of the DOJ's new stand, even workarounds
like CanPay are iffy.

A group of 19 state attorneys general – all from states
that have legalized medical and/or recreational use –
have written congressional leaders urging legislative
action in the wake of the DOJ's policy reversal. "Despite
contradictions between federal and state law, the
marijuana industry continues to grow rapidly," the
attorneys general wrote.

They pointed to data suggesting legal sales of cannabis
products will exceed $20 billion a year by 2021 –
revenues that exist outside the reach of regulators. "The
grey market makes it more difficult to track revenues
for taxation purposes, contributes to a public safety
threat as cash intensive businesses are often targets for
criminal activity, and prevents proper tracking of large
swaths of finances across the nation," they wrote.
Several members of Congress – Republicans and
Democrats, alike – also have balked at the policy
reversal, specifically singling out Attorney General
Jeff Sessions, who pushed the change. Among them,
Senator Cory Gardner, R-Colo., who claims he received
assurances during Sessions confirmation process that
the DOJ would not step up enforcement against state-
legalized cannabis businesses. "With no prior notice to
Congress, the Justice Department has trampled on the
will of the voters of CO and other states," the senator
tweeted.

And it has trampled on the rights of businesses and
their customers to take advantage of modern, secure
and regulated payment systems.

Patti Murphy is Senior Editor at The Green Sheet and President of
ProScribes Inc. Email her at patti@greensheet.com.

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