By Stephen C. Webster on Jan 24, 2014
Pot purveyors in states that permit adults to use marijuana for medical or recreational purposes will soon be able to deposit their money in bank accounts, Attorney General Eric Holder announced Thursday.
Speaking at the University of Virginia, Holder explained that cash-only marijuana sales create unnecessary security risks. Current law prohibits banks from accepting money they know to come from the sales of illegal drugs, which has caused enormous problems for dispensaries in the 20 states that permit marijuana sales.
"There's a public safety component to this," he said. "Huge amounts of cash -- substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited -- is something that would worry me just from a law enforcement perspective."
"They want to be able to use the banking system,” he added. “And so, we will be issuing some regulations I think very soon to deal with that issue."
Despite growing outcry from the scientific and medical communities, the U.S. Drug Enforcement Agency continues to classify marijuana as Schedule I, a class reserved for the most disorienting and harmful substances like LSD, peyote and heroin. The British medical journal Lancet, however, ranks marijuana as significantly less harmful to society than alcohol.
President Obama made a similar statement in conversations with New Yorker reporter David Remnick, according to a story the magazine published last weekend. The President said that marijuana’s dangers are no worse than alcohol “in terms of its impact on the individual consumer,” adding that “it’s important” for legalization to move forward in Colorado and Washington due to the vast racial and economic disparity evident in marijuana arrest statistics. The President also said he’s told his daughters that marijuana use is “a bad idea, a waste of time, [and] not very healthy.” The White House later clarified that Obama does not support legalization.
Holder did not specify when marijuana sellers would be granted access to the U.S. banking system. It is also unclear whether banks will be able to issue credit or business loans to marijuana entrepreneurs, many of whom view the increasingly accepted industry as a potential financial boom in the making.
Officials in Colorado anticipate that newly minted marijuana businesses will generate over $578 million in sales for their state in 2014 alone, and about $67 million in new tax revenues. Economists estimate the total value of U.S. marijuana sales each year to be somewhere between $10 billion and $40 billion.
Harvard economist Jeffrey Miron also estimated in 2010 that an additional $20 billion in new tax revenues and cost savings on law enforcement could be reaped from the industry if marijuana is legalized nationwide and regulated similarly to alcohol.