Feds Issue Guidelines Regarding Banking Transactions With Licensed Marijuana Enterprises

Washington, DC: Regulators from the US Department of Justice and the US Treasury Department’s Financial Crimes Enforcement Network issued memos late last week providing limited guidance to financial institutions wishing to engage in transactions with state-authorized marijuana businesses.

The Justice Department memo, authored by Deputy Attorney General James Cole, states that the prosecution of financial institutions who interact with lawful marijuana businesses "may not be appropriate," as long as those businesses are not involved in activities deemed to be of ‘high priority’ for federal law enforcement officials, such as providing cannabis to minors, diverting cannabis to states where the plant is not yet legal, or engaging in the trafficking of other illicit substances other than cannabis. However, the guidelines acknowledge that federal laws generally prohibiting banks from interacting with parties involved in the production or sale of marijuana "remain in effect."

The Treasury memo, authored by Financial Crimes Enforcement Director Jennifer Shasky Calvery, states that all financial institutions which provide services to licensed marijuana-related business should file a "Marijuana Limited" suspicious activity report (SAR) with the agency. She adds, "Financial institutions and other persons subject to FinCEN’s regulations must report currency transactions in connection with marijuana-related businesses the same as they would in any other context, consistent with existing regulations and with the same thresholds that apply."

It is unclear whether the guidelines will provide sufficient clarity to banking institutions that wish to offer services to facilities engaged in cannabis commerce.

In January, US Attorney General Eric Holder acknowledged that federal laws forcing state-licensed marijuana establishments to operate on a ‘cash-only’ basis posed a potential public safety risk for the facilities, their employees, and their customers.

For more information, please contact Allen St. Pierre, NORML Executive Director, or Erik Altieri, NORML Communications Director, at (202) 483-5500.