Banks in states that legalize pot use can now work with marijuana businesses
In 2012, HSBC was busted by U.S. and international regulators for laundering drug money for global cartels. ¬†A year later, they were imposed a $1.9 billion fine, but rumors abound that the financial institution is still providing services to criminal organizations despite their guilt and penalty.
So with this precedent in place, it is quite interesting to see on Feb. 14 that regulators within the Obama administration have now ruled that banks that service states with legal marijuana laws can now do business with the sellers of pot, and without the threat of criminal prosecution.
¬†US regulators on Friday told banks they can allow marijuana dealers to open accounts, as states around the country begin to legalize the drug for medical and in some cases even recreational use.
Wary of being caught up in “drug money” crimes, banks had been reticent to have dealings with legal vendors of pot since the state of Colorado allowed its sale for recreational use in January. – Yahoo
This move by the Federal government is a huge relief for pot shops in both Colorado and Washington state, which have seen a barrage of robberies and burglaries due to having to store large amounts of cash onsite, and in private safes.
Additionally, banks could begin to see a new form of capitalization as the growing trend for pot legalization is leading many states to approve both medical marijuana usage, and even recreational use. ¬†In just two months since it became legal, marijuana sales in both Washington, and especially Colorado have been extremely lucrative, and are even causing many businesses to succumb to supply shortages. ¬†With this new approval by the Feds to allow banks to contract accounts with pot businesses, the potential for growth in not only with the marijuana businesses themselves, but also in the revenues streams of banks that can increase business through loans and deposits.
The ironic thing about money, even if you discount the biblical proverb that it is the root of many evils, is that moral laws in society can always be bypassed when the potential for profit is extremely high. ¬†And while illegal drug use in the U.S. is not quite at epidemic proportions, the overall cost to taxpayers currently, as well as to the lives of low level criminals in this form of ¬†‘victimless ctime’, is quickly being overshadowed in what will eventually become a nationwide trillion dollar industry.
Kenneth Schortgen Jr¬†is¬†a writer for¬†Secretsofthefed.com,¬†Examiner.com, and hosts¬†the popular¬†web blog,¬†The Daily Economist.¬†Ken can also¬†be heard Friday evenings giving an weekly economic report on the¬†Angel Clark radio show.