Treasury Agency Blindsided By Sessions Marijuana Crackdown

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Photo Credit: AP

The Justice Department didn’t coordinate with the government agency responsible for advising banks in states where marijuana is legal when Attorney General Jeff Sessions rescinded an Obama-era policy that paved the way for the legal marijuana industry, according to a new report.

According to Reuters, congressional queries regarding the policy shift weren’t answered by the Treasury Department’s Financial Crimes Enforcement Network, which was reportedly caught off guard by the decision.

Sessions moved last week to rescind the 2013 Cole memo, which discouraged federal prosecutors from bringing marijuana-related charges in states where the substance had been legalized.

The Justice Department declined to comment to Reuters about whether it coordinated the policy shift with the Financial Crimes Enforcement Network.

But Sessions’ memo rescinding the Obama-era policy did not address how financial institutions who do business with marijuana growers, processors and distributors should handle the new policy.

The Financial Crimes Enforcement Network issued guidance in 2014 for banks doing business with the marijuana industry.

The agency requires banks to file suspicious activity reports for certain transactions. But under that guidance, banks could note whether they believed clients in the marijuana industry were operating within the bounds of state laws.

Eight states and the District of Columbia have legalized recreational marijuana, and dozens of states have approved medical cannabis.

The substance, however, remains federally prohibited and is considered a Schedule 1 controlled substance in the same class as heroin and LSD.

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