Congress asked to provide fix for cash-only pot stores

McClatchy Washington BureauSeptember 10, 2013 

— King County Sheriff John Urquhart says that the war on drugs has failed and that legalizing marijuana is the way to go, which might be a good thing in his case. In less than nine months, he’ll have 61 retail pot shops operating in his county, the most in Washington state.

But when marijuana issues got a long-awaited airing Tuesday on Capitol Hill, Urquhart told the Senate Judiciary Committee that he fears the state’s 334 new pot stores will be inviting targets for armed robbers: The shops will be forced to do business only in cash, because federal law prevents drug-related businesses from opening bank accounts.

“I am simply asking that the federal government allow banks to work with legitimate marijuana businesses who are licensed under state law,” said Urquhart, a 37-year police officer who was elected sheriff last year.

The request drew a sympathetic response from Senate Judiciary Chairman Patrick Leahy of Vermont, who said he wants to make sure that state-licensed pot businesses can use armored vehicles to transport their money, as well.

“I don’t want to see a shootout somewhere,” Leahy said.

Deputy Attorney General James Cole told senators that the Justice Department is studying the problem and agrees “that it is an issue we need to deal with.”

Pot advocates welcomed the committee’s first hearing devoted solely to marijuana issues.

But they called it way overdue, with 20 states already allowing marijuana for medical use, and Washington and Colorado making history as the first to allow retail shops for all adults, beginning next year.

While the Senate is not considering any legalization bills this year, pot backers are still giddy by their progress, with polls showing growing numbers of Americans now wanting to end the national prohibition against marijuana.

They’re claiming the addition of a major ally after Arizona Republican Sen. John McCain last week told constituents at a town hall meeting in Tucson that “maybe we should legalize.” And they count the influential Leahy among their fans, pleased that he’s urging the federal government to stop prosecuting possession cases involving small amounts of pot.

McCain and Leahy represent two of the 10 states targeted Monday by the Marijuana Policy Project for full legalization by 2017, along with California, Maine, Nevada, Hawaii, Maryland, New Hampshire and Rhode Island. The group is banking on Alaska to go first, in 2014.

Leahy called Tuesday’s hearing to examine the growing tension between state and federal marijuana laws. It came less than two weeks after the Justice Department said it would allow Washington state and Colorado to proceed with their plans, even though marijuana has long been banned by Congress.

As part of its new policy, the Justice Department said it would allow the states to sell and tax marijuana if they did a good job policing themselves, including by making sure that no pot is sold to minors or allowed to cross state lines. Cole told the senators that the Justice Department is counting on the states to perform as they promised.

Instead of helping the states sell marijuana, opponents said the Justice Department should be moving to shut down their operations.

Kevin Sabet, a legalization opponent who served as an adviser on drug issues to President Barack Obama and former Presidents George W. Bush and Bill Clinton, said Washington state and Colorado will become the first jurisdictions in the world to allow retail sales and commercial production. And he said their operations will far surpass marijuana liberalization measures in places such as the Netherlands or Spain.

Sabet told the senators that allowing the two states to start “a massive for-profit commercial industry for marijuana” will endanger Americans by leading to more drug sales and trafficking. And he said that as the price falls in those states, the pot is sure to be sold across state lines at a handsome profit.

“We are at a precipice,” he said.

Sen. Chuck Grassley of Iowa, the top Republican on the Judiciary Committee and co-chairman of the Senate Caucus on International Narcotics Control, said that the U.S. is now going to allow the sale of a “dangerous and addictive drug” and that doing so may violate international drug treaties.

Leahy said it’s no surprise that states are looking for new ways of dealing with marijuana, saying criminalization has contributed to the nation’s soaring prison population, disproportionately affecting people of color.

“No one can question that the black market for illegal marijuana in this country endangers public safety,” he said.

After getting the green light from the Obama administration to sell the illegal drug, officials in both Washington state and Colorado have now turned their focus to the banking front, saying the current laws would create a huge risk to public safety if they’re not changed.

Mark Kleiman, Washington state’s top marijuana consultant and a professor of public policy at the University of California, Los Angeles, said the two states will conduct “hundreds of millions of dollars per year in cash transactions, with attendant risks of robberies.”

“That risk to public safety seems to me unnecessary and unaccompanied by any good result,” Kleiman said in a written statement to the Judiciary Committee.

And in a joint statement delivered to the panel, Washington Gov. Jay Inslee and the state’s attorney general, Bob Ferguson, said that forcing the pot businesses to operate with cash will also make it harder to audit their books and track their income.

But Urquhart told the senators that even though Washington state needs a fix on federal banking laws, drug laws will still be enforced in the state.

“What we have in Washington state is not the wild, wild West,” he said.

Email: rhotakainen@mcclatchydc.com; Twitter: @HotakainenRob

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