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"All of the Department's bank investigations conducted as
part of Operation Chokepoint are now over, the initiative
is no longer in effect, and it will not be undertaken again,"
Assistant Attorney General Stephen Boyd stated in an
August letter to members of the House Judiciary and
Financial Services Committees.
The Federal Deposit Insurance Corp. also deep-sixed a list
of "high risk" businesses it deemed subject to Operation
Choke Point, the letter stated. "We share your view that
law abiding businesses should not be targeted simply for
operating in an industry that a particular administration
might disfavor," Boyd told lawmakers.

Nearly simultaneous with this move, however, the DOJ
signaled it may resuscitate efforts challenging state
initiatives legalizing medicinal and recreational pot
sales – efforts that were shelved by the DOJ under the
Obama Administration. In letters delivered in late July to
governors in four states (Alaska, Colorado, Oregon and
Washington), Attorney General Jeff Sessions warned he
has "serious concerns" about legalized pot sales.

Several governors responded insisting the Attorney
General's concerns are ill founded. "The State of Colorado
has worked diligently to implement the will of our citizens
and build a comprehensive regulatory and enforcement
system that prioritizes public safely and public health,"
Colorado Governor John W. Hickenlooper responded in
a letter to Sessions. "We believe the objectives underlying
our regulatory and enforcement system are aligned with
the federal government's desire to control the production
and sale of marijuana and to protect public safety and
public health."
Leaving cash on table

For now, however, legal marijuana sales remain primarily
a cash business. It's costly and dangerous for those
operating pot dispensaries. Many report having to hire
armed guards to protect their workers and the vaults full
of cash. They also pay higher taxes since federal employee
withholding rules impose 10 percent surcharges on
employer payments not filed electronically.
Cash is a fast way to transact business. But when the Fed
and others talk about the need for faster payments, they're
not talking about cash. With $6.7 billion in 2016 sales, it's
not a whopping big business, but as more states legalize
pot sales that number will grow exponentially. Imagine
the revenue opportunities created for banks, ISOs and
their acquiring partners if all those cash sales migrated to
credit and debit cards.

Patti Murphy is Senior Editor of The Green Sheet and President of
ProScribes Inc. She is also the founder of InsideMicrofinance.com. Email
her at patti@greensheet.com.

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