Jeff Sessions just made it even harder for California’s legal marijuana businesses to find a place to put their cash
- Jeff Sessions’ decided to rescind relatively lax guidelines for federal regulation of state marijuana laws.
- That has left California and the cannabis industry scrambling for ways to handle all the cash flowing from legal recreational pot use.
- Since Sessions’ move, banks and credit unions have even less incentive to help.
California’s burgeoning cannabis industry, already heavily reliant on cash and detached from banks, could face even more barriers to the mainstream after U.S. Attorney General Jeff Sessions rescinded the Obama era guidelines, known as the Cole memo, which eased federal regulation of marijuana.
Sessions’ decision has left California’s state government and the legal pot industry scrambling for ways to handle all the cash that will come flowing in.
Moving to a more regulated market should, in theory, encourage financial institutions to bank cannabis businesses, but Sessions’ actions on Jan. 4 — just days after recreational adult marijuana use became legal in California — put a freeze on bank activities, leaving businesses and the financial institutions that look to support them in an even murkier state of affairs.
“The withdrawal of the Cole memo really couldn’t have come at a worse time, because now is the time that the types of banks and credit unions that are willing to take on more risk would have been entering the market,” said Robert McVay, partner at Harris Bricken, a Seattle-based law firm with a practice group dedicated to cannabis law.
“If you weren’t already involved, this doesn’t seem like the right time to start,” he added.