While medical marijuana is legal in Los Angeles pursuant to state law, and the use and sale of recreational marijuana is going to be legalized in 2018, it is still illegal as it a Schedule One controlled substance on the U.S. Controlled Substances Act of 1970 (USCSA). This means that a marijuana industry business owner cannot have a bank account for his or her business. This results in business owners having little choice but to store large amounts of cash on hand at all times and that makes them targets for robbery. This is addition to the large amounts of marijuana on hand that is also a target for robbery.
According to a recent news article from NBC 4 News, a dispensary in North Hollywood was robbed in what police have described as a takeover robbery. The alleged offense involved four suspects, two male and two females who rushed into the Los Angeles medical marijuana dispensary with various firearms and took large amounts of cash and marijuana. During the robbery, the suspects attempted to destroy the security cameras, but it appears that some footage was captured prior to that. A worker at the dispensary allegedly recognized one of the suspects as a regular patient at the dispensary. When the police were called, they stopped a vehicle matching the description of the suspect’s vehicle, but it was not the correct car.As our Los Angeles medical marijuana lawyers can explain, banks that are insured by the Federal Deposit Insurance Corporation (FDIC), which is basically all banks except for credit unions that are FCUA insured, are prohibited under federal regulations from engaging in monetary transactions in property derived from specified unlawful activity pursuant to Section 1957 of Regulated Acts 8000.
This means that if a bank were to allow a medical marijuana business to open an account, even though it is legal under California law, it would be taking money from a specified unlawful activity and would lose their FDIC insurance. FDIC insurance protects everyone’s account up to a certain limit if something happened that caused their money to be lost. Since nobody would deposit money in a bank that was not FDIC or FCUA insured, the bank would basically go out of business. With respect to the specified unlawful activity, Subsection (f)(2) states that any property (money) deprived from proceeds of an illegal activity which is the sale of drugs illegal under the USCSA.
There have been several attempts by members in Congress to make an exception to the FDIC regulations so that medical marijuana business could have bank accounts in states where marijuana is legal, but these efforts have largely stalled in committee. There is a more recent effort that has not gotten anywhere either. Hopefully this will change in the near future because this is a very serious issues facing medical marijuana businesses in Los Angeles.
The Los Angeles Cannabis Law Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.
Legal marijuana creates and industry for new breathalyzers, October 24, 2017, by Lauren Silverman, Marketplace
More Blog Entries:
Banking Regulations Leave the Marijuana Industry Subject to Violent Crime, August 14, 2017, by Cannabis Law Group