The Legal Problem Of Regulation And Marijuana

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Regulation and Marijuana Since 1863, the United States has had a dual banking system composed of both federal and state chartered institutions. This means that banks and other financial institutions have the option of choosing between a federal charter issued by the Office of the Comptroller of the Currency or a state charter from a state banking regulator (Hill, 2014, p. 8). When it comes to marijuana banking however, federal regulation holds all the power. “Under federal law, marijuana is still classed as a Schedule I drug which means that it is not legal in any form, including for medical purposes” (Erb, 2015). Federal financial regulators have complete authority to punish institutions that do not comply with federal law. Aaron Smith, executive director of the National Cannabis Industry Association calls the lack of banking services “the most urgent issue facing the legal cannabis industry today” (Sullum, 2014). Without help from Congress to bring down these walls, most financial institutions will not provide their services to those in the marijuana industry. The risk is simply too great. Also, if financial institutions continue to be federally liable for the illegal actions of their potential marijuana business customers, financial services will continue to be unavailable. The next few sections will look at some of the obstacles facing the marijuana industry, specifically how the federal laws are preventing businesses from gaining access to financial services.
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