News Release

“Public Banks Could Break the Impasse Over Marijuana Money”

Public Banks Marijuana

The National Law Review recently reported that “cannabis is legally sold in 23 states and the District of Columbia, either for recreational or medical use. … Despite the significant amount of cash flow, many cannabis businesses are unable to open and maintain bank accounts and deposit funds into an account due to current federal laws. Most notably, the product is still illegal under the federal Controlled Substances Act. Because of cannabis’ federally illegal status, the transfer of funds from the sale of cannabis could be considered money laundering. [C]compliance is of the utmost importance in creating and maintaining a successful relationship between cannabis business owners and financial institutions. Monitoring these accounts requires much attention and expense from these banks.”

MARC ARMSTRONG, marc[at]commonomicsusa.org, @CommonomicsUSA
Armstrong is president of Commonomics USA, which has just launched the Public Banking Policy Project, to “provide legal, policy, and economic information to advocates of public banking.”

He just wrote the piece “Public Banks Could Break the Impasse Over Marijuana Money” for Truthout. Armstrong writes: “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. …

“One can argue that a network of public banks that solely focus on pot money would do a superior job of setting the gold standard for implementation of the DOJ guidance memo and any subsequent guidance provided by the DOJ or other federal enforcement organizations. In fact, a network of public banks between states that have legalized recreational marijuana can establish best practices in partnership with the primary bank regulatory agencies (the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency) and the DOJ.”

Armstrong was founding executive director of the Public Banking Institute.