Public Banks Could Break the Impasse Over Marijuana Money
With nearly a dozen state initiatives legalizing recreational marijuana on the November ballot, the market for legalized marijuana is certain to expand. But, because marijuana continues to be classified as a Schedule 1 drug by the Drug Enforcement Agency (DEA), private banks are effectively prohibited from fully participating in this market -- the compliance burden is too high and individual employees face the threat of prosecution. A network of city, county and state-owned public banks, sharing best practices, may be an effective way to offload the compliance burden so that marijuana-related businesses can confidently accept payments and deposits can be placed into a network of public banks, which could develop the systems needed for legal compliance with the Department of Justice and federal regulatory agencies. Short of legalization of marijuana, this may be the best way to protect local businesses and banks from a market that is fraught with risk....
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