Illinois marijuana industry could be cash-only

2014-01-26T06:00:00Z Illinois marijuana industry could be cash-onlyBy T.J. Fowler
January 26, 2014 6:00 am  • 

SPRINGFIELD — Even after the state implements rules for the sale of medical marijuana, federal banking regulations could make Illinois’ budding cannabis industry a cash-only operation.

While the state has moved to legalize using marijuana for certain medical conditions, federal regulations prevent marijuana dispensaries and related businesses from using federally-insured banks.

“What it means for a lot of businesses is that they’re forced to operate entirely in cash,” said Taylor West, dep-uty director of the National Cannabis Industry Association in Washington, D.C. “That’s not just the sales side. It also affects the business side.”

Unable to open a checking account or get approved for a credit card, many dispensaries in other states have to pay their bills, manage their payroll and pay taxes with enormous sums of cash.

“Often they have to pay these things in bags of cash or convert them into money orders,” West said. “They have to move a lot of cash, and that creates a lot of risk for staff and public safety... and it really creates a situation that’s unsustainable.”

Last August, Gov. Pat Quinn signed a law authorizing a pilot program to legalize medical marijuana in Illinois. The stan-dards for access have been called some of the strictest in the nation, but officials are still working out the finer points of the law’s implementation.

Last week, public health officials released draft rules for the program that would require patients to provide the state with fingerprints, un-dergo a background check, pay $150 annually for a special photo ID and surrender their FOID cards.

But the continued federal prohibition of marijuana has created issues for vendors in states where it’s legal. Feder-ally-insured banks could face serious consequences from the Justice Department for violating federal statutes that prohibit drug trafficking and money laundering.

“So the idea is that banks are required to report suspicious activity, and that includes banking activity,” said West. “There’s nothing that clarifies that (the rule’s) not intended for legal businesses.”

State Sen. Jason Barickman, R-Bloomington, said the prob-lem illustrates why he opposed legalization when it was first proposed.

“It’s as if the majority who supported this bill shrugged off the fact that this is prohibited by federal law,” he said. “What’s most concerning to me is that we would appear to be enacting an entire bureauc-racy in our state for one drug and in doing so, we’re ignoring all of the implications that this would have on a federal level.”

State Rep. Lou Lang, D-Skokie, isn’t sold on that ar-gument.

“I would say that’s a feeble excuse for not improving the lives of thousands of sick peo-ple,” he said. “It didn’t bother 20 other states and there’s no reason Illinois can’t take care of its sick people.”

Lang, who sponsored the medical marijuana measure in the House, added that the safety concerns might be over-blown.

“While there is a risk, I’m not hearing a whole bunch of stories about thieves or other criminals causing a lot of havoc,” he said. “Maybe it’s happening, but I haven’t heard anything. It is what it is. We can’t change federal law here in Illinois.”

Dispensaries aren’t the only ones affected by the regulation, either. West said businesses that work with the marijuana industry, like insur-ance companies or grow-light manufacturers, also could fall under the same restrictions.

Even West has had run-ins with the regulation.

“When we applied, my or-ganization was turned down for a credit card,” she said. “It was because we had ‘cannabis’ in our name, frankly.”

She added the gap in the law can only be rectified at the federal level, and that, while no concrete progress has been made, officials in Washington have begun talking about the issue.

Copyright 2015 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(5) Comments

  1. DheBiyyMXMMXSaehz
    Report Abuse
    DheBiyyMXMMXSaehz - February 13, 2014 7:21 pm
    That this this s*ittt iz 'bunch of P. Kuywhinn Large GOP Turd. Legalisze Don't Kritizsiyzse. Pierce the Love of PLUR or Leave ME ALONE. Cannabis a curse word 222 _never_ use in case of bank robbery (ckkcheazssee), I think knoddt as a formner Dallas REZSS. and avid supporter of the Kennedy BNBOBRYBPHFGFFFSBD Anti-MOB.!!!

    -T. Soerrn
  2. pitdogg2
    Report Abuse
    pitdogg2 - January 27, 2014 11:16 am
    I find it amazing that now that the state was FORCED to implement a CCW law that now every new law has the SURRENDER your F.O.I.D clause. WAKE the heck up folk and vote these idiots out of office.

    So tell me why for ever that when someone was found guilty of having/smoking weed that it was NEVER a court ordered F.O.I.D forfeiture? Now a days you don't even see a judge cop writes a ordinance violation ticket for 250-500 dollars. that is unless you want to fight the ticket AND pay court cost along with the ticket.
  3. watchandlearn
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    watchandlearn - January 26, 2014 7:20 pm
    Make that check out to the Montana reality company!
  4. Dookie
    Report Abuse
    Dookie - January 26, 2014 10:51 am
    Watchandlearn says it perfectly!! I am assuming they are afraid that these seriously ill people are going to get so stoned that they get so much motivation from smoking it that they will break into someone's house and steal all there twinkles and Doritos!!! And these idiots are our leaders.
  5. watchandlearn
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    watchandlearn - January 26, 2014 9:16 am
    It seems to me that the marijuana industry has always pretty much been a cash only buisness so nothing new there.

    Surrender their F.O.I.D cards? lol!!! Just to able to use medical marijuana ? What a joke!
    Meanwhile, all the thugs, ganbangers, and illeagal pot users already walking our streets will continue to use marijuana or other worse drugs, and some will as usual still carry their illeagal weapons.

    I feel much safer already knowing that this new legal marijuana use law will keep law abiding citizens who have prescriptions from be allowed to own any firearms.LOL!!!!!

    Maybe next, we can pass legislation forcing anyone who purchases alcohol to undergo a background check, mandatory fingerprints , and apply for a special alcohol use ID, while we make it mandatory for alcohol users to turn in their F.O.I.D. cards and surrender their firearms and drivers license.

    Now theres some legislation that would make even Michael Bloomberg proud!!!
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