Marijuana has just become legal in Colorado. Last week I was there to visit family, and marijuana was all over the news. One evening the local news reported on an armed robbery of a business that sells marijuana. While the reporter didn't explicitly say "See, this is what happens when drugs are legal," the message was certainly implied.
It is fairly clear why this robbery took place. It also seems safe to predict that more will occur. Businesses that sell marijuana have an exceedingly difficult time banking. Federal regulations make it nigh impossible for those who sell marijuana to bank. This means that they must keep a lot of cash on hand. It is possible, though I would say highly unlikely, that the government will act so that marijuana sellers can access banking services. Assuming that this does not happen, such businesses will continue to have large amounts of cash. This is, predictably, an attractive target for criminals. It is not the legalization of marijuana that is causing crime, it is the government regulation of banking. If furniture stores were unable to access banking services, it is quite reasonable to assume that criminals would increasingly target furniture sellers.
Businesses that cannot use banks will find an alternative way to avoid holding large amounts of cash. A few possibilities come to mind. Marijuana businesses could use gold or other traditional stores of value. I also wonder if they will turn to bitcoin. Having minimal knowledge of how bitcoin is bought and sold, I cannot say what sorts of transactions costs might be involved with exchanging cash for bitcoins. If these costs are not significantly high, and if my assumption about governmental failure to act is accurate, perhaps marijuana sellers will turn to bitcoin as an alternative to banks.
It is fairly clear why this robbery took place. It also seems safe to predict that more will occur. Businesses that sell marijuana have an exceedingly difficult time banking. Federal regulations make it nigh impossible for those who sell marijuana to bank. This means that they must keep a lot of cash on hand. It is possible, though I would say highly unlikely, that the government will act so that marijuana sellers can access banking services. Assuming that this does not happen, such businesses will continue to have large amounts of cash. This is, predictably, an attractive target for criminals. It is not the legalization of marijuana that is causing crime, it is the government regulation of banking. If furniture stores were unable to access banking services, it is quite reasonable to assume that criminals would increasingly target furniture sellers.
Businesses that cannot use banks will find an alternative way to avoid holding large amounts of cash. A few possibilities come to mind. Marijuana businesses could use gold or other traditional stores of value. I also wonder if they will turn to bitcoin. Having minimal knowledge of how bitcoin is bought and sold, I cannot say what sorts of transactions costs might be involved with exchanging cash for bitcoins. If these costs are not significantly high, and if my assumption about governmental failure to act is accurate, perhaps marijuana sellers will turn to bitcoin as an alternative to banks.
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