Marijuana

Banking Regulations Seen as Major Hurdle for Marijuana Industry

Banks can't do business with them, so it's cash-only

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The federal government is taking a hands-off approach to state marijuana legalization schemes, at least for the time being. But as Washington and Colorado begin to create the regulatory framework for legal marijuana, they may require some federal help.

Specifically, under the federal Controlled Substances Act, any bank that takes money from an illegal enterprise can lose its FDIC coverage and potentially be prosecuted. This means that unless Congress amends the law, marijuana businesses must be cash-only, creating a potentially dangerous situation in which they must keep thousands of dollars in cash on hand.