So long as marijuana remains illegal at the federal level, many financial institutions (FIs) will remain wary of the industry, no matter how many states legalize marijuana. However, there may be changes on the horizon for dispensaries and other marijuana-related businesses (MRBs) seeking access to banking services. According to a recent report from the Financial Crimes Enforcement Network (FinCEN), 368 banks and credit unions are providing services to MRBs. For MRBs, this is undoubtedly a positive, if still nascent, development. For this growth to continue, FIs and MRBs must work together to ensure that financial services are provided to, and used by, the marijuana industry in a responsible, safe, and sound manner.
The Regulatory Framework for Banking MRBs
Although marijuana remains illegal under the federal Controlled Substances Act (CSA), 29 states and the District of Columbia have authorized the use and sale of medical marijuana, and eight states and the District of Columbia have legalized its recreational use. In response to these developments, the Department of Justice’s Deputy Attorney General James M. Cole
Banking Marijuana Businesses—Understanding the Challenges and Opportunities
IN BRIEF
- Banks and marijuana-related businesses (MRBs) must work together to ensure that financial services are utilized in a responsible, safe, and sound manner.
- Guidance from the DOJ and FinCEN provide the framework for banking the marijuana industry.
- It is critical for banks and their MRB customers to understand this framework as well as the challenges and best practices for banking high-risk merchants.
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