The legalization of marijuana as a medicine in 33 states, 11 of which allow its use as a recreational drug, has made weed a dynamic American industry, among the economy’s fastest-growing sources of new jobs. California alone, with $3.1 billion in projected marijuana sales for this year, has a legal market as large as that of any country on the planet.
Entrepreneurs grumble nonetheless. Not since Ronald Reagan ran for president have American newspapers been so full of anecdotes about heroic jobs-creating businessmen stymied by regulation.
Their gripe concerns banking. Marijuana may be legal in many states, but it remains illegal under federal law, which classifies it, implausibly, as a highly dangerous Schedule 1 narcotic. A bank that does business with weed growers or sellers therefore puts its assets at risk. Proprietors of marijuana businesses find it hard to start 401(k) retirement plans for workers and to get insurance. They can’t avail themselves of federal bankruptcy protection. And they need to conduct a lot of their business in cash.