Drug cartels are already trying to take advantage of the Obama administration’s new rules allowing banks to do business with marijuana shops in Colorado and Washington, a top Drug Enforcement Administration official testified to Congress on Tuesday.
Thomas M. Harrigan, the agency’s deputy administrator, also said DEA is seeing signs that Mexican cartels are working to increase the level of THC, the main active ingredient in marijuana, to keep up with home-grown American product. He also said domestic production is on the rise.
Testifying to a House subcommittee, Mr. Harrigan gave a glimpse of some of the changes in marijuana trafficking since the two states’ legalization. He said he couldn’t go into details because investigations are ongoing, but said they’ve already seen signs that gangs are “attempting to exploit” the new banking rules, which the Treasury Department announced three weeks ago.
“Cash, as you very well know, is the driving force for these drug-trafficking organizations,” he told the House oversight committee’s government operations subcommittee. “Drug trafficking organizations aren’t particularly in the business to traffic drugs. They’re in the business to make money.”
The federal government continues to grapple with the growing inconsistencies in laws on marijuana. Colorado and Washington have legalized personal recreational use and a number of other states recognizing medicinal use with a doctor’s prescription, but it remains illegal in most states and under federal law.
John Walsh, the U.S. attorney for Colorado, said the challenge for federal officials is to figure out standards that allow them to enforce federal law uniformly across states that have different laws.
He said that’s why the Obama Justice Department has outlined enforcement priorities such as keeping marijuana out of the hands of children and preventing cartels from being involved in the trade.
The Treasury Department, meanwhile, issued new rules that gave banks a green light to do business with marijuana shops, in a move that state officials hoped would ease the dangers of businesses holding so much cash.
“The conflict and the chaos in policy is becoming even wider-spread here,” said Rep. John Mica, the Florida Republican who is chairman of the government operations subcommittee.
The DEA was unable to say how much of its enforcement efforts are concentrated on marijuana versus other drugs. Mr. Harrigan said most criminal organizations don’t limit themselves just to marijuana, so it would be difficult to separate out those operations.
He also said his agency’s operations in Colorado and Washington haven’t changed much since those states legalized personal use, since the DEA generally only targets major criminal operations, and those remain a priority for federal officials.
Mr. Harrigan got into a dispute with Democrats on the panel when he said he supports having marijuana classified as a Schedule I controlled substance, pointing to emergency room visits and high levels of gang activity that surround the drug’s use and trafficking.
“You haven’t kept up with society, you haven’t kept up with science,” Rep. Steve Cohen, Tennessee Democrat, told Mr. Harrigan.
Rep. Earl Blumenauer, an Oregon Democrat, said there was a difference between marijuana and other drugs such as heroin: “Marijuana doesn’t appear to be killing people.”
Rep. Thomas Massie, a Kentucky Republican, wondered whether the Obama administration would stop enforcing federal laws on industrial hemp, which resembles marijuana, but contains almost no THC. A number of states, including Kentucky, want to be able to grow industrial hemp for its many economic uses.
Mr. Harrigan said the administration is revisiting its industrial hemp policy.