Marijuana banking and Senate hearing: Will the fix in the works stick?

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When the Obama administration announced that it wouldn't sue to stop Amendment 64 and other state cannabis laws, anticipation about yesterday's Senate hearing on marijuana shifted from whether the feds could be forced to make a decision to what they'd say about allowing measures to take effect. As such, the biggest headline to emerge involved steps that should allow pot shops to legally use the banking system -- a development cheered by Denver's mayor and an A64 co-author. But another weed expert worries about whether the fix will stick. Among those who testified at the hearing was Deputy Attorney General James Cole, who authored the memo clarifying the Justice Department's position on marijuana in Colorado and Washington, which also approved an A64-like policy last November. As reported by the Associated Press, Cole acknowledged that the inability of cannabis businesses to use banks due to laws involving money laundering and drugs (marijuana remains illegal at the federal level) was something "we need to deal with" and the Justice Department is "working on it" in collaboration with federal banking regulators.

Afterward, Denver mayor Michael Hancock cheered the development. "Denver recognizes that the Department of Justice took an important step today by acknowledging the need to address the issue of legalizing marijuana-industry banking," he said in a statement. "The current inability of these cash-only businesses to legally access banking institutions creates accountability barriers and exposes them and our neighborhoods to unnecessary safety risks, including serious criminal activity.

"It is imperative that banking regulators and justice officials take action in order to create an effective and safe environment to transact business that will help protect these businesses -- particularly in states and cities with regulatory systems in place -- as well as Denver's families and neighborhoods," Hancock added.

Attorney Brian Vicente, who helped co-write Amendment 64, also feels positively about the hearing. Corresponding via e-mail, he writes, "Yesterday's Senate hearing ushers in a new era of marijuana policy -- one where marijuana is strictly regulated at the state level, and the federal government leaves responsible marijuana consumers and businesses alone.

"Colorado has been given a clear path to regulate marijuana, and we need to focus now on establishing and funding the regulatory structure which will keep the feds out," Vicente concludes.

However, marijuana attorney Warren Edson sounds a cautionary note.

Continue for more about marijuana banking and yesterday's Senate hearing, including more photos and three videos. "Overall," Edson acknowledges, the hearing represented "a great, positive step to have that kind of discussion on a national stage. And Department of Justice appears to be saying the right things -- saying, 'Follow these rules and we'll leave you alone.'"

Still, he continues, "I'm frustrated by the fact that there's no discussion about rescheduling marijuana or changing any of the federal rules. They're basically saying, 'Here's what we're going to do' without any legal basis to it. And if a new administration comes in and says, 'We're going to do something different,' they can, because the laws haven't changed."

In the context of financial institutions, the successor to President Barack Obama "could technically say that depositing money from a medical marijuana business into a bank is money laundering, because you're taking money that's dirty under federal law and it comes out the other side clean and clear. And without a law change, we're still dealing with that situation."

When viewed from this perspective, comments by Cole and other federal officials amount to "positive words but no actual change in the law," Edson believes. "Now, that's better than them saying, 'We're coming to kick your ass.' But it wasn't exactly, 'Go ahead. No problems.'"

Look below for three videos -- a report about the hearing from Reuters, a specific clip devoted to testimony by Jack Finlaw, chief legal counsel for Colorado Governor John Hickenlooper, and a significant portion of the session uploaded by marijuana activist and radio personality Russ Belville. They're followed by more comments about the hearing courtesy of Tom Angell, co-founder of Marijuana Majority and a close observer of the Colorado cannabis scene.

Comments from Marijuana Majority co-founder Tom Angell:

"It's about time our federal lawmakers took up this issue. Polls show that the majority of voters support legalizing and regulating marijuana, but far too many elected officials continue to act like this issue is still some dangerous third-rail of politics that's too dangerous to touch. This is a serious, important and mainstream issue, and it's good to see politicians finally treating it as such.

"As senators made clear with important questions about legal marijuana providers' access to banking, armored car services and tax write-offs that are available to any other business, the Obama administration's recent memo to prosecutors is a good first step, but it will not remove all of the roadblocks that stand in the way of effective implementation of state marijuana laws. The next step is for Congress to amend the Controlled Substances Act to make it clear that America is moving in a new direction when it comes to marijuana policy.

"As Sen. Sheldon Whitehouse pointed out, the Obama administration has repeatedly shifted its marijuana policy since 2009, when it released a memo saying that medical marijuana providers operating in 'clear and unambiguous compliance' with state law would not be a focus for federal law enforcement. Since that time, though, this president has overseen the closure of more state-legal marijuana businesses in one term than were shuttered during two terms of the Bush administration. It remains to be seen whether prosecutors will follow through this time and finally help the president uphold his campaign pledge to respect state marijuana laws.

"One thing the the president could do right now to signal that he's serious about this most recently announced shift in policy would be to use his commutation powers to release some of the medical marijuana prisoners that have been put behind bars by his federal agencies."

More from our Marijuana archive circa August 26: "Marijuana: Can Senator Patrick Leahy force Eric Holder to talk Colorado pot?"

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