By Chris Conrad
WCL News — A major shift in federal banking policy may have been ignited with the August 29, 2013 US Dept. of Justice policy memo. According to reports from CNN.com and the Huffington Post, the agency offered leeway to banks and other financial institutions to provide banking services to marijuana-related businesses that comply with eight priorities that were outlined in Deputy Attorney General James Cole’s memo. Members of the National Cannabis Industry Association have reported closure of personal and business bank accounts, discontinuation of merchant processing services, and even the termination of armored car services. Yesterday’s apparent reversal opens the door to allowing the estimated $1.5 billion regulated marijuana market access to business checking and savings accounts, merchant processing, and other vital services.
“Our NCIA members and others in the regulated medical and adult-use marijuana industry across the nation have gone to great lengths to ensure they are complying with heavy reporting and auditing requirements without bank accounts,” said executive director Aaron Smith. “One of the most basic and fundamental tools for doing so. Cannabis business professionals, regulators, state lawmakers, tax collectors, patients, community members, and even bankers themselves all agree that these businesses should have access to financial services.”
The NCIA and other groups continue to fight to get the onerous IRS 280(e) tax code modified to exempt state-legal businesses from the provision, which disallows normal tax deductions for business expenses to enterprises that engage in cannabis-related activities. The tax code, on the other hand, allows full businesses deductions for businesses that engage in alcohol-related activities and actually provides additional tax benefits for those who manufacture and distribute pharmaceutical drugs. Most of the businesses that have come under attack by the IRS under the provision have been medical marijuana dispensary operators. — West Coast Leaf News Service
