An state representative who has worked extensively with Arkansas banks in the search for financial institutions that will provide banking for the state’s burgeoning medical cannabis industry says that Attorney General Jeff Sessions’ announcement that he will rescind Obama-era guidelines that direct the federal government to take a hands-off approach to marijuana in states that have legalized medical and recreational cannabis will spook banks that are prepared to provide banking for dispensaries and cultivators, potentially forcing cannabis related businesses to deal solely in cash.
Rep. Doug House (R-N. Little Rock) was once a skeptic on medical marijuana, but said he has seen enough evidence of its benefits that he’s now a believer in cannabis as medicine. Since the voters legalized medical cannabis in the state, House has spearheaded an effort to secure banking for cannabis-related companies in order to stave off a possibility that he said outright “terrifies” him: the state’s dispensaries and cultivators forced to deal in — and secure — piles of cash.
House said that Sessions’ announcement that he will rescind the 2013 “Cole Memo” — a “guidance document” that stipulates the feds should take a hands-off approach to those following the law in states where cannabis is legal — is “inviting a disaster” when it comes to banking, with banks nationwide potentially bailing out of handling cannabis-related accounts rather than risk the wrath of the federal government. That includes the few banks in Arkansas that have quietly stepped forward in recent months to begin the process of establishing banking with the state’s dispensaries and cultivators.
“If you repeal those memos, then you’re putting literally hundreds of millions of dollars or billions of dollars of cash on the streets of America,” House said. “That is a recipe for murder, extortion, robbery and official corruption.”
House said that while it is within the power of Sessions’ office to rescind the Cole Memo, he added that one stipulation of the Justice Department’s budget is that the DOJ may not use federal funds to prosecute marijuana offenses by those who are following the law in states where medical or recreational marijuana has been legalized. “It gets a little technical and of course they can prosecute cartels and things like that even in states where it’s illegal,” House said, “but the restriction of the use of federal money is a federal fiscal doctrine.”
House is talking about the Rohrabacher-Blumenauer Amendment (previously known as the Rohrabacher-Farr Amendment). Passed as an amendment to the federal budget in 2014, the amendment has so far kept the DEA, DOJ and federal prosecutors from waging war on medical cannabis. The re-authorization of the amendment has been opposed by Sessions, who has ratcheted up his push for a new round of Reefer Madness even though Donald Trump said multiple times during the presidential campaign that he would leave the regulation of medical marijuana to the states.
A statement released today by the Arkansas Medical Marijuana Association also referenced the Rohrabacher-Blumenauer Amendment, calling on the state’s Representatives in Congress to vote for its inclusion in the next federal budget. From the statement:
The Arkansas Medical Marijuana Association has reviewed Attorney General Jeff Sessions’ announcement that he is rescinding a series of memos adopted to ensure the federal government does not interfere with states’ rights to legalize and administer medical marijuana laws. In light of this news, the Association calls on the Arkansas congressional delegation to support reauthorization of the bipartisan Rohrabacher-Blumenauer Amendment as part of the 2018 budget. The Rohrbacher-Blumenauer Amendment prevents the Justice Department from interfering with medical marijuana businesses and patients that operate in compliance with state law. The Association will work with the congressional delegation to ensure that Arkansas continues to have the right to administer a successful medical marijuana program.
House said he believes Sessions’ rescinding the Cole Memo will throw the issue of what to do about legalized cannabis back on Congress, which he hopes will turn the issue over to the states to regulate. “They’re going to have to make a decision: either ‘okay we’re going to enforce the federal law as far as distribution,’ or else we repeal the law and let the states regulate it,” House said. “Considering the number of states that have already gotten involved in it, that’s the better way to do it.”
While he’s a big proponent of medical cannabis, House said he believes the federal government should crack down on states where cannabis has been approved for recreational use. “I don’t see the utility of it, other than that’s just what people want to do,” he said. “I think the social costs are too high. Medical, I’m absolutely for it these days. I’ve just talked to too many people and seen too much evidence. It has medical benefits for some people, and to force people to go onto the black market and buy poisoned trash off the streets is just not an appropriate public response.”
House said that his conversations with bankers about the coming of medical cannabis has been “encouraging,” with most saying their job is to provide a service to the community. Bankers understand the danger a cash-only cannabis economy could hold for the state and the nation. “To have that much cash floating around the streets is dangerous for our community,” he said. “They’re basically having their feet knocked out from under them. So I’m sure Congress is going to step in. I think I know the best answer is: let the states regulate it and let the feds worry about the interstate commerce of it.”