MBank’s New Joint Venture – Marijuana Banking!

MarijuanaPlant“Then God said, ‘Behold, I have given you every plant yielding seed that is on the surface of all the earth, and every tree which has fruit yielding seed; it shall be food for you;’”  ~Genesis 1:29

The Portland Business Journal recently reported [MBank exploring medical marijuana banking] that Gresham-based MBank is toking talking about possibly:

…providing banking services to the medial marijuana market.  According to the bank’s President and CEO, Jef Baker:

There’s “clearly a need to provide a banking solution for law enforcement and taxing agency concerns about what has become an all-cash business in Oregon,

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While MBank takes no stand in support of, nor opposition to medical marijuana, there is clearly a need to provide a banking solution for law enforcement and taxing agency concerns about what has become an all-cash business in Oregon,” Baker said in an email.

For those in need of a gentle reminder as to why banks are proceeding with such trepidation in Oregon – where medical marijuana is regulated and perfectly legal – the answer is that federal law still says it is illegal to manufacture, distribute, and possess marijuana, even when state law authorizes its use. Furthermore, federal law supersedes state law where there is a direct conflict between them.  See, Federal Controlled Substances Act, 21 U.S.C. § 801, et seq.  In short, it’s a federal crime.  According to the Business Journal article:

…banks and credit unions are legally barred from banking such business under the Bank Secrecy Act. However, 23 states plus the District of Columbia allow medical marijuana, and the issue is further complicated with Washington and Colorado legalizing recreational use. Oregon voters will decide in November whether to legalize recreational use.[1]

On August 29, 2013, Deputy Attorney General James M. Cole issued a memo [“the Cole Memo”] to all U. S. Attorneys, setting forth certain enforcement guidelines for those states where marijuana is, in one form or another, legal.  The essence of the Cole Memo is that so long as each state follows eight specific guidelines, the Feds will defer to their rules. Now that must be a breath of fresh air good news to the marijuana lobby!

Regarding the issue of staffing levels, it is reported that:  “Bank officials said they would staff the service as needed.” My guess is they will be high….~PCQ

[1] I have always found the term “recreational use” a bit of an oxymoron.  It’s not like an exercise one engages in to get into better physical shape. I’ve never heard of any weekend “puff-athon” competitions between marijuana athletes.  But who knows?