Republican gubernatorial candidate Adam Laxalt is the only attorney general from a state where recreational marijuana is legal to not sign a letter to Congress urging a fix for the pot industry’s lack of banking.
A bipartisan group of attorneys general signed a letter Jan. 16 that was addressed to Republican Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan, among other leaders. It urged passage of the SAFE Banking Act, sponsored by Democratic Oregon Sen. Jeff Merkley in the Senate and Colorado Rep. Ed Perlmutter in the House, or other similar legislation.
“Businesses are forced to operate on a cash basis,” the letter said. “The grey market makes it more difficult to track revenues for taxation purposes, contributes to a public safety threat as cash intensive businesses are often targets for criminal activity, and prevents proper tracking of large swaths of finances across the nation.”
Laxalt did not sign on to the letter, and his office did not respond to requests from The Nevada Independent for comment about why he is not involved in the push or about his opinions of banking for the marijuana industry.
Because marijuana is still a Schedule 1 controlled substance in the eyes of the federal government, banks avoid handling pot industry money. Gov. Brian Sandoval’s Gaming Policy Committee held a meeting in November to examine the legal questions raised because proceeds from Nevada’s marijuana industry are circulating in the economy.
Attorney Candace Carlyon testified then that banks are supposed to shut down accounts if they find they’re related to the marijuana industry, although she believes some companies get around it by hiding the money’s source through a series of business entities. It’s unclear how far removed money would need to be from a marijuana transaction before it ceases to be “dirty money” in the eyes of federal government, and Carlyon suggested the best outcome for the panel would be if it pushed Congress for action on the matter.
Laxalt opposed the 2016 ballot measure that legalized recreational marijuana in Nevada, although he recently touted his office’s work defending the Nevada Department of Taxation’s regulations in court in the past year.
“My office has expeditiously facilitated the implementation of the law in the face of considerable uncertainty about the status of federal enforcement activity,” he wrote in a Jan. 4 press release in which he stopped short of taking a position on Republican Attorney General Jeff Sessions’ decision to rescind the Cole Memo. The memo had offered state-legal marijuana businesses a level of certainty that the federal government would not raid them.
One of Laxalt’s key donors, Las Vegas Sands casino mogul Sheldon Adelson, provided more than 90 percent of the funding in the $3.7 million campaign against recreational marijuana in Nevada and was a similar force in a 2014 effort to block medical marijuana in Florida. Adelson was a major contributor in Laxalt’s 2014 attorney general race; he and his wife Miriam gave $20,000 directly to Laxalt’s gubernatorial campaign in 2017.
Attorneys general in the eight other states that have legalized recreational marijuana signed on to the letter. They include:
All Democratic members of Nevada’s congressional delegation are co-sponsors of the legislation, but Republican Sen. Dean Heller and Republican Rep. Mark Amodei are not.