Earlier this summer, Uruguay became the first country in the world to fully legalize weed. In July, pharmacies started selling it over the counter to registered adults. But now, after pharmacies received some troubling news, it looks like U.S. banks are ruining legal weed in Uruguay.
Uruguay’s Legal Weed Program Could Face Financial Setbacks
Uruguayan lawmakers have worked for years to come up with a plan to undermine the illegal drug trade. And this summer, those plans went into full effect when pharmacies started selling cannabis.
The idea is to set the price of legal weed at a rate below black market prices. To keep the program as secure as possible, the country requires adults to confirm their identities using a fingerprint scanner.
After launching this new program last month, the number of people registered to buy legal weed has almost doubled. There are now more than 12,500 people enrolled.
That number was expected to continue rising—until U.S. banks dropped some troubling news on financial institutions this week.
According to The New York Times, a number of high profile U.S. banks including Bank of America warned Uruguayan banks to stop working with any businesses related to cannabis.
The letters said that the U.S. banks would cut ties with any banks in Uruguay that continue working with the country’s legal weed industry. After receiving the letters, banks in Uruguay began passing the message along to any pharmacies that were selling legal cannabis. In particular, many Uruguayan banks said they would no longer work with pharmacies selling weed, even though it’s completely legal.
As a result, somewhere around 15 pharmacies in Uruguay have already stopped selling legal weed. And another 20 or so that were thinking about joining the program have put off making a decision.
Final Hit: U.S. Banks Are Ruining Legal Weed In Uruguay
The entire thing has to do with one particular legal restriction in the United States. The Patriot Act, which was passed in the wake of the September 11 attacks, state that financial institutions cannot do business with anyone working with certain substances. And cannabis is on that list.
As a result, U.S. banks are extremely reluctant to work with anyone related to weed. That holds true even in places where weed is legal.
For example, most banks and credit companies refuse to work with dispensaries and other weed businesses in states where cannabis is legal. As a result, most cannabis businesses are forced to operate as cash-only enterprises.
But during Obama’s era, there seemed to be some room for change. In 2014, his administration said that the federal government would probably not interfere with banks if they were working with cannabis companies in weed-legal states.
But now, Uruguay is raising even more questions. In particular, it raises the question of how U.S. law might have ripple effects on cannabis laws in other countries. So far, it seems as if U.S. banks are erring on the side of caution. And from the looks of things, this could equate to a scenario in which U.S. banks are ruining legal weed in Uruguay.