How U.S. Banks Are Hurting The Marijuana Industry in Uruguay
Although it sounds strange, only one country has fully legalized marijuana for recreational use. That country is Uruguay, and you’d be forgiven for thinking that their laws have nothing to do with the U.S.
First, we need to fill you in on the details of Uruguay’s legalization of marijuana. It is not a total free-for-all. Users have to register with the government. Their fingerprints are scanned every time they buy from a dispensary – a dispensary that happens to be a pharmacy. And there are quotas, so that no one person can buy an unlimited amount of pot.
After the law came into effect in July, the legal marijuana industry was immediately booming. Pharmacies were struggling to keep up with the demand.
That is, until U.S. banks stepped in. Bank of America said they’d stop doing business with anyone selling pot in Uruguay. Other banks followed suit. Do the pharmacies have any real options?
U.S. banks are allowed to do business with marijuana sellers
Since pot became legalized in some states of the U.S., American banks have been given the go-ahead to continue doing business with those who are selling the substance. As long as they screen businesses for money laundering and other illegal activities, there’s no laws preventing them from opening these accounts.
However, most banks have shied away from the industry, leading many marijuana dispensaries to remain cash only, instead of using POS machines (see options at this site). Some smaller banks will still do their business, but it remains difficult.
And so, U.S. banks can continue doing business with Uruguayan pharmacies. However, they are opting out.
Pharmacies face a tricky choice
While marijuana has been flying off shelves since being legalized, it may not be in a pharmacy’s best interests to continue distributing the substance. After all, pot is only one part of their business, and their accounts with American banks may be indispensable.
Similarly, Uruguayan banks have important connections with American banks that they won’t want to sabotage simply for the sake of one budding industry.
At the moment, pharmacies are the only outlets permitted to sell marijuana in Uruguay. This quandary could put a sudden end to what started out in such a promising fashion.
This trend might continue
The marijuana industry is complicated. Since it has been prohibited in most states and countries for so long, and is still illegal in most places, legalization is not as simple as a law being passed.
In the U.S., federal regulations are at odds with state rules, and the DEA can step in on the basis of a minor infraction or query, singlehandedly bankrupting a supplier.
And now, it seems like it is only getting more complex. U.S. banks have the power to crush marijuana sellers, for the sake of their reputations or connections. Pot is worth only so much, and the trouble may be worth more than the potential monetary reward.
The trend, for now, will continue, as those fighting for legalization of marijuana face the opposition of a system that, at times, rivals the might of the government.
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