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U.S.: Senate Committee Allows Banks To Provide Services To Legal Marijuana Stores

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Fourth Straight Senate Victory for Marijuana Reform

Senate Bill Would Also Allow D.C. to Tax and Regulate Marijuana

By Steve Elliott
Hemp News

The Senate Appropriations Committee on Thursday voted 16 to 14 to allow banks to provide services to marijuana businesses. Currently, because marijuana is illegal under federal law, both medical and non-medical marijuana businesses are unable to access banking services like any other business. The amendment was offered by Sen. Jeff Merkley (D-Oregon).

Consequently, many marijuana businesses operate on a cash-only basis, leading to huge public safety issues as businesses become the target of robberies, and are forced to hire armed security to protect their takings.

“One of the motivations for legalizing marijuana is to eliminate the illicit market and put marijuana in the hands of a legitimate regulated market,” said Michael Collins, deputy director of national affairs at the Drug Policy Alliance (DPA). “Whether you are for or against legalization, you have to recognize that having marijuana businesses handling huge amounts of cash with nowhere to deposit the money is a public safety concern that Congress has to tackle.”

U.S.: Start-Ups Step In For Wary Banks To Serve The Marijuana Industry

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By Steve Elliott
Hemp News

Several recently created start-ups are looking to solve one of the most persistent problems facing the nascent marijuana industry in Colorado, Washington and other legal states: the cash-only nature of a business which is still defined as illicit by the federal government.

While voters in Washington and Colorado in 2012, chose to bring marijuana commerce into the mainstream, with Oregon and Alaska joining the club in 2014, the federal government hasn't, shall we say, shown much political courage when it comes to biting the bullet and joining the 21st century.

VISA and MasterCard won't process transactions from marijuana dispensaries, fearing federal racketeering charges since cannabis is still nonsensically considered a Schedule I controlled substance under federal law. And most banks are scared silly by the prospect of "marijuana money" being in their vaults, for the same reason.

This means most medical marijuana dispensaries and recreational pot stores have a constant influx of cash, and the options of what to do with it range from dangerous on the one hand to more dangerous on the other.

Tokken, Hypur, and Kind Financial, among other start-ups, have started putting together software that helps banks and pot shops monitor and record sales, with the eventual goal of moving transactions away from cash, reports Nathaniel Popper at The New York Times.

U.S.: Credit Union Fights In Court To Become World's First Marijuana Bank

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By Steve Elliott
Hemp News

In a high-stakes, closely watched lawsuit, the founders of the Fourth Corner Credit Union, which wants to become the world's first bank focused on the marijuana industry, is suing the U.S. Federal Reserve for the right to do so.

There's more at stake that just the fate of the credit union, reports Joel Warner at the International Business Times. The results of the case could have a ripple effect across the cannabis industry, which everyone agrees is currently lacking proper financial services.

"This transcript is going to be read around the world and your decision will have an effect around the United States in a major, major way," Mark Mason, attorney for the plaintiffs, told Judge R. Brooke Jackson on Monday.

"This isn't something that is going away," Mason said during his impassioned oral arguments for the credit union, whose founders include several members of his immediate family. “This is something that is going to be a part of the next generation and the future, and we need to get it right. And if we are not going to have banking ... and have millions and millions of dollars on the streets where bad things can happen, that is not responsible.”

U.S.: What Happened When States Legalized Marijuana

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By Steve Elliott
Hemp News

When the sale of marijuana for recreational use became legal in Colorado and Washington last year -- and in Oregon this year -- a few predictions, both good and bad, were made about the outcome. Here's what has actually happened so far.

Positives

• No increase in teen use: Opponents of legalization claimed young people would flock to weed if the legal penalties were removed. That hasn't happened, reports Daniel Dale at The Star. Major studies have found no increase in teen use in states the legalized medical marijuana; in Colorado, fewer students said they used pot after legalization than before.

• Tax windfall: Colorado has taken in more than $86 million in cannabis taxes and fees this year, far more than for alcohol. Washington state is predicting $1 billion in marijuana taxes over the next four years. "All that money that was going to criminals and the hands of cartels is now being sent toward legitimate taxpaying businesses," said Morgan Fox of the Marijuana Policy Project.

Colorado: Feds Reject Marijuana Bank

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By Steve Elliott
Hemp News

The federal government has dealt yet another setback to attempts to provide banking services to the marijuana industry.

The Federal Reserve, in a Wednesday court filing, said it doesn't intend to accept any money connected to cannabis sales, because marijuana remains a Schedule I controlled substance under federal law, reports the Associated Press.

The stance, taken in response to an attempt by a Colorado-based company, appears to signal a shift in the position of the federal government. Last year, the U.S. Treasury Department had issued rules for how banks can accept marijuana money.

"We're frustrated," said Andrew Freedman, in charge of marijuana coordination for Colorado Gov. John Hickenlooper. "We tried to do the most with the building blocks of instructions they sent us, set up the most rigorous solution. And we still are left with confusion."

The court filing came in a legal tussle between the Federal Reserve and Fourth Corner Credit Union, established in 2014 to serve Colorado's marijuana industry, now worth $700 million annually.

Fourth Corner can't open without permission from the Federal Reserve, which said in its court filing that "transporting or transmitting funds known to have derived from the distribution of marijuana is illegal."a

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