By Bob Young for the Seattle Times

The U.S. Department of Justice is working with federal regulators to allow banking services for legal pot merchants in Colorado and Washington, the chief news to come out of what some considered a historic Congressional hearing.

The U.S. Department of Justice is working with federal regulators to allow banking services for pot merchants in Washington and Colorado, the two states that have legalized adult possession of small amounts of marijuana.

Deputy Attorney General James Cole acknowledged the current dilemma, that without changes at the federal level, legal pot stores will operate on a cash-only basis because banks fear they’ll violate federal law by accepting pot money.

“We are currently talking with bank regulators on ways we can deal with this,” Cole told a U.S. Senate hearing on the conflicts between states and the federal law, which prohibits all pot.

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