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The bud business is booming in Colorado, the first state to legalize retail recreational marijuana sales to adults age 21 and older. In the first week of sales alone, pot retailers raked in more than $5 million. Combined wholesale and retail pot sales are expected to generate a jaw-dropping $600 million annually.
But here's the kicker: The businesses can't open bank accounts. The issue would make for the most bureaucratically frustrating episode of "Weeds."
Mo' Money, Mo' Problems
Despite the surging sales, many of Colorado's legal weed retailers don't have access to regular banking services, reports The Huffington Post.
Many banks won't accept marijuana businesses as clients because the sale or possession of marijuana is still illegal under federal law. Despite the Department of Justice's slight wink and nod about prosecution in Colorado, banks are concerned that weed-related accounts could get them in trouble for money laundering. As a result, marijuana retailers can't obtain traditional bank accounts or take advantage of traditional business tax write-offs.
Marijuana businesses say they're taking a big hit from the banking problem because they often cannot accept credit cards. They say cash-only transactions create unnecessary tax and payroll burdens, and present safety risks.
A number of actions are being taken on both state and federal levels to give marijuana businesses access to banking services.
The Denver City Council is urging banking regulators to grant Colorado marijuana businesses access to the federal banking system. Meanwhile, Rep. Ed Perlmutter (D-Colo.) is spearheading the Marijuana Business Access to Banking Act, which would provide legal protections for banks that offer services to legal marijuana-related businesses in the state.
The Department of Justice is also doing its part by drafting legal guidance on how banks can work with marijuana businesses in states like Colorado and Washington that have legalized recreational marijuana for adults 21 and over, reports The Wall Street Journal.
Goodbye green, hello platinum.