Cannabis-friendly states or states that have legalized cannabis are requesting to meet with U.S. Attorney General Jeff Sessions to discuss a resolution to the conflict between federal and state marijuana laws.
State treasurers from California, Illinois, Pennsylvania, and Oregon had sent Sessions a letter saying that banks and businesses need to have greater clarity as to how federal law enforcement is going to deal with the growing trend of cannabis legalization in the country.
The letter was released by California Treasurer John Chiang, who’s also running for governor.
Why meet with Sessions?
Cannabis is considered illegal by the federal government even as 29 states have already legalized the drug in one form or another.
However, in January this year, Sessions decided to repeal an Obama-era policy – called the Cole Memorandum – that had kept federal authorities from prosecuting businesses involved in the cannabis industry as long as they are in compliance of state laws. In his memo, Sessions directed the Department of Justice and U.S. attorneys across the country to devote necessary federal resources in the enforcement of federal cannabis laws.
Session’s rescission of the Cole Memo came just days after the state of California kicked off legal recreational cannabis sales.
Then just last week, Sessions released another memo, this time encouraging federal attorneys to pursue the death penalty against drug dealers. This move came after President Donald Trump vowed to liberate the country from the opioid epidemic and called for the capital punishment to be used more frequently in the prosecution of drug traffickers.
This new directive brings to light the vulnerability of the cannabis industry. Under federal law, there is a possibility for any individual convicted of cultivating more than 60,000 cannabis plants or of processing more than 60,000 kilograms of cannabis products to face death penalty.
The good news, for now, is that Congress had extended the restrictions preventing the federal authorities from prosecuting medical cannabis cases in legalized states.
What state treasurers wish to achieve
In their letter, Chiang and the other state treasurers requested for a meeting with Sessions so they could figure out a way to allow banking institutions to handle money from cannabis sales in cannabis-legal states.
Their main concern is that cannabis remains a prohibited substance at the federal level, and because of this, federally chartered banks and financial institutions are not willing to handle money coming from the cannabis industry. As a result, cannabis growers and retail shops are stuck with large amounts of cash, making them vulnerable to robbery and to making inefficient financial transactions.
The letter said that with legalization taking place in various states, there are sound reasons for instituting federal policies that would provide banks, financial institutions, and businesses that work with the cannabis industry comfort in knowing that they won’t be prosecuted. These institutions and businesses should also know that they will not lose customer assets just for being involved in the cannabis industry.
According to the letter, the absence of such federal policies leaves financial institutions and the cannabis industry in the dark.
The state officials said that sitting down together would provide regulators, policymakers, and law enforcement officials from both sides of the fence a unique opportunity to reach a consensus.
Other than the four state treasurers, the letter was also signed by the Maine Credit Union League and several cannabis industry groups.
California’s cannabis industry
Legal recreational cannabis sales kicked off in California on Jan. 1. However, many banks do not want to have anything to do with money from cannabis sales out of fear that it could expose them to legal issues with the federal government.
This shortage of banking services for the state’s emerging cannabis industry is seen as a major challenge in developing a thriving and regulated marketplace.
In an attempt to address this banking problem, Chiang had formed a special task force.
(Feature image grabbed from California Treasurer John Chiang’s Facebook page.)