There's a good chance that states across the country will soon begin legalizing the sale and possession of marijuana for recreational purposes. As Colorado has shown, the potential tax revenue is too significant to ignore.
But this won't solve the marijuana industry's biggest problem. Regardless of how many states legalize the drug, it remains illegal under federal law. As a result, banks are prohibited from providing financial services to the industry. Most importantly, this encompasses deposits and other cash management services. The net result is an industry awash with cash and participants forced to operate as quasi-illegitimate enterprises.
Although the federal government has recently tried to remedy the problem, its solution is only temporary and not enough to solve the issue. As Motley Fool contributor John Maxfield discusses in the following video, this leaves cannabis growers and sellers with few options. And perhaps even more significantly, it leaves banks in an uncomfortable gray zone that's fraught with the risk of criminal prosecution.
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