Credit card processing for marijuana merchants may be near after U.S. Attorney General Eric Holder publicly supported banking access for such. In a speech at the University of Virginia last week, Holder also said that the U.S. Department of Justice would “soon unveil proposed regulations” regarding the buying and selling of medicinal marijuana in the 18 U.S. states where it is legal for medicinal use, and two states (Colorado, Washington) where it was recently legalized for recreational purposes for adults.
Banks Hesitant About Servicing Marijuana Merchants…For Now
Though 20 U.S. states and the District of Columbia currently allow either medical or recreational marijuana use, banks remain hesitant to offer credit card processing for marijuana merchants. Despite the state laws and regulations, marijuana use remains illegal under U.S. federal law which is enough to keep banks at a distance. It is a point Sanette Chao, Director of Corporate Affairs and Communications at American Express, stressed on CBSNews.com this week.
“We prohibit the use of the card for marijuana transactions and adhere to federal law in such matters,” Chao said.
Marijuana merchants feel state laws and federal laws regarding medicinal marijuana need to be consistent with one another. Banks are fearful of fines and penalties from federal lawmakers and law enforcement, public perception and the air of criminality.
Credit Card Processing for Marijuana Merchants Would Alleviate Security Concerns
Among the many issues, said Holder, is security for medicinal marijuana merchants. Marijuana fully remains a cash-dominant business. Many marijuana merchants in Colorado and Washington have expressed concerns over the transport of large sums of cash, fearing robberies and/or hijacking. When the handling thousands of dollars in cash becomes overwhelming, some marijuana merchants have resorted to opening bank accounts under false pretenses. Having the convenience of credit card processing would no doubt ease such fears.
“There is a public safety component to this,” Holder told CBSNews.com. “Huge amounts of cash, substantial amounts of cash just lying around with no place for it to be appropriately deposited, is something that would worry me, just from a law enforcement perspective.”
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