PNC Bank is closing the bank accounts of the Marijuana Policy Project (MPP), the country's biggest marijuana interest group. According to officials at MPP, the accounts will close July 7.
PNC Bank's move comes amidst mounting speculation of a Department of Justice crackdown on marijuana businesses and those who provide financial and other services to them. It also calls into question the legal status of accounts of political action committees (PACs) and marijuana industry associations, which may also receive money directly from businesses engaging in federally-prohibited activity. Further, the announcement comes on the heels of a decision by the U.S. Court of Appeals for the Tenth Circuit ( Safe Streets Alliance v. Alternative Holistic Healing, LLC, No. 16-1048) allowing certain Racketeer Influenced and Corrupt Organizations (RICO) Act lawsuits to proceed against Colorado marijuana businesses and corporations that service them.
"If I had marijuana stocks right now, I'd sell them short," commented Kevin A. Sabet, former senior drug policy advisor to three U.S. Administrations and President of Smart Approaches to Marijuana (SAM). "Financial services companies are reading the tea leaves from Washington and are realizing that aiding and abetting federal crimes by the marijuana industry is risky business. Federally-regulated companies like banks are probably the most concerned given their exposure to potential criminal and civil liability. And they should be."
These concerns are exacerbated by allegations from Colorado that state marijuana license holders were also running a criminal organization that shipped marijuana out of state, and a report from Oregon stating that at least 70 percent of marijuana market transactions there are illegal.
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