If there is one government official who can take credit for helping marijuana businesses emerge from the grey market, it's former U.S. Deputy Attorney General James Cole.

Cole, who worked in the Justice Department from 2010 to 2015, wrote three memos during his tenure, known collectively as the Cole Memos, that outlined clear guidelines for where prosecutors should focus their resources in enforcing the  Controlled Substances Act--and allowed marijuana entrepreneurs to confidently set up their operations. In an interview this week with Marijuana Business Daily, he continued his advocacy on behalf of pot businesses.

Cole said his biggest concern with the state of the industry is the lack of access to banks.

"The last thing you really want here is a cash business, because there's a lot of cash involved, and what that breeds is armed conflict," he says. "And that ... is a big danger for public safety." Cole says that's why in 2014 he issued his third memo, aimed at persuading banks to accept law-abiding marijuana clients who want to get their cash out of the dispensaries. Because marijuana is still illegal at the federal level, most banks are still not comfortable servicing the industry.

Cole's first memo actually resulted in a wave of crackdowns on dispensaries around the country. But in 2013, a year after Colorado and Washington legalized recreational marijuana, his second one specified that the main priorities for federal prosecutors were to stop the use of violence in the cultivation and sale of cannabis, and to eliminate sales to minors, money laundering, the selling of other illegal drugs, and companies that are fronts for drug cartels. Entrepreneurs were then able to follow those recommendations as a rough path to state compliance and to avoid federal prosecution.

Some states adopted Cole's guidelines, allowing companies that comply with state regulations to operate without any problems. In others like California, raids by state law enforcement agencies persist to this day. Since 2014, Congress has included a rider in the omnibus spending bill that prevents the DOJ and Drug Enforcement Administration from using funds to interfere with states implementing their own medical marijuana laws.  

In the Marijuana Business Daily interview, Cole says states like Colorado and Washington have done a "reasonable job" regulating their marijuana markets and that the fears of the DOJ, such as increased criminal activity and marijuana crossing state lines to feed the black market, have not come true. 

He adds that he has asked Congress to reform the Controlled Substances Act, which classifies marijuana as a dangerous substance with no medical value.

"Probably the biggest frustration over time ... is marijuana continuing to be a Schedule I drug," he tells MjBizDaily. "And that, I think, needs to be changed. Because there is an enormous amount of anecdotal evidence of marijuana having some sort of medical efficacy."