The Fed: Powell says Fed won’t let banks take marijuana money until federal guidance comes

A woman shops at Oregon’s Finest, a marijuana dispensary in Portland, Oregon.

Federal Reserve Chairman Jerome Powell on Wednesday had bad news for companies in Colorado, Washington and other states in the marijuana business — the central bank is in no hurry to let federal banks take money from them.

“This is a very difficult area, because many state laws permit the use of marijuana and federal law still doesn’t,” Powell said at a press conference. “So it puts federally-chartered banks in a very difficult situation.”

“Of course, our mandate has nothing to do with marijuana,” he added. “We would love to see it clarified.”

Companies have without luck complained that they face security as well as practical difficulties by banks’ refusal to do business with the multibillion-dollar industry. Massachusetts Democrat Elizabeth Warren and Colorado Republican Cory Gardner have introduced legislation in the Senate that would make it illegal for federal prosecution in states where the drug is legal.

Small banks without federal charters can do business with marijuana firms in states where the drug is legal.

The Kansas City Fed had barred Colorado-based Fourth Corner Credit Union from serving cannabis-related companies, though a federal judge overturned the order. Even with the judge’s order, the Kansas City Fed only will allow it to deal with those who support marijuana businesses rather than dispensaries that deal the drug directly.

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