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Maine Pot Growers, Bankers Skeptical of New Federal Guidelines
02/14/2014   Reported By: Tom Porter

The Obama administration today gave banks a roadmap for doing business with legal marijuana sellers without getting into trouble. Marijuana-related businesses are technically barred from opening bank accounts because the drug is still a controlled substance at the federal level. This guidance from the Justice and Treasury Departments, however, is intended to preserve the government's enforcement power, but also increase the availability of financial services for legal marijuana businesses. That's potentially good news for  Maine's medical marijuana industry, which is poised for growth. Tom Porter has more.

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In October, the list of conditions which can be treated with medical marijuana was expanded to include post-traumatic-stress-disorder, Parkinson disease and others.  According to some estimates this could see the number of licensed marijuana caregivers in Maine more than double, to as many as 3,000.

Paul McCarrier is an advocate for the group Medical Marijuana Caregivers of Maine, which represents the state's estimated 1,300 caregivers. He says the situation is a problem.

"Caregivers are legitimate businesses here in the state and we're continuing to try to work to make sure that we can serve more patients," McCarrier says. "And as more patients come into the medical marijunana program, there's going to be a need for caregivers to have access to banking."

McCarrier's says he dubious, however, about the effectiveness of new government-issued guidelines, because they do not represent a change in the law. "This is just a memo which has no legal standing in court," he says.

The banking situation was highlighted recently by U.S. House Rep. Earl Blumenauer of Oregon at a congressional hearing on federal marijuana policy.

"Federal law forces legitimate marijuana businesses to be entirely cash," Blumenauer said. "They can't get a bank account and delivering their tax payments with shopping bags full of cash - if you care about money laundering, if you care about tax evasion and theft - is crazy. It's just crazy."

"I was quite surprised when my bank account got shut down," says Erica, who did not wish to reveal her last name.  Erica is a licensed caregiver in western Maine.

She had operated for about a year-and-a-half without any problem, until one day last summer when her debit card was declined at a flower store, even though she had money in her account. A letter from the bank followed telling her she had violated the bank secrecy act and her account was being closed down.

She managed to withdraw her cash before the account was terminated. But being left without any banking services, Erica says, was difficult: Paying everyday bills in cash is not easy.

"Found it hard to pay my mortgage, my bills, electric bills, the utility bills," she says. "It just really frustrated me that I became a second-class citizen, in a way, though this. It was ilke my right to a financial life, or financial health, was taken away."

"When you talk about the real dangers around this plant, they revolve around the regulations and the laws that have grown up around it and not from the plant itself," says Becky De Keuster, who is with the Wellness Connection of Maine, which employs 50 people and operates medical marijuana dispensaries in four locations throughout the state.

Recent press reports have highlighted how certain dispensaries out west have had to take elaborate security measures as they're forced to deal with large amounts of hard cash. De Keuster won't say exactly how the Wellness Connection of Maine copes with the lack of access to banks, but she does admit that the current set up often leaves legitimate business owners feeling like criminals.

"This is something that is legal at the state level in 21 states now, and the District of Colombia, the home of our federal government. And yet we continue to treat these businesses and these patients as though they are criminals, and you can create the stereotype that you're trying to avoid," she says.

De Keuster also says that the new guidelines annoumced by the Obama administration are unlikely to have real teeth until marijuana is decriminalized at the federal level.

The guidelines are designed to allow banks and other financial institutions to serve marijuana-related businesses, while ensuring that they know their customers' legitimacy, and remain obligated to report possible criminal activity.

Many in the banking industry however, still have reservations about accepting marijuana money. Chris Pinkham is president of the Maine Bankers Association. Whatever guidance the Treasury and Justice Departments may issue, he says banks are ultimately accountable to the federal regulators.

"They're the ones that we're regulated by and therefore we'd have to abide by their standards," Pinkham says. "If they were to accept the attorney general's standards and make it part of their rule-making, or make it clear to banks that that was a permissible activity, we'd be looking forward to engaging in business relationships."

Until then, Pinkham expects banks will continue to follow the rules they've always followed. "It's such a difficult situation because, frankly, I think his will be - you and I will laugh in 24 months or three years, this will be a routine, just another business."

The bottom line, he says, is that for now at least, marijuana remains a federally-controlled substance.

Learn more about the federal guidelines. 

Photo:  Courtesy Erica (who did not wish to reveal her last name).

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