Breaking: Banks Receive Limited Approval To Work With Legal Cannabis Businesses
WASHINGTON, DC — Legal cannabis businesses may have found just the solution they’ve been searching for. The US Treasury and Justice Departments introduced guidelines Friday to address the concerns of banks who wish to deal with retail cannabis stores, cultivation facilities, and more.
Jennifer Shasky Calvery, director of Treasury’s Financial Crimes Enforcement Network, explains that the rules are intended to “move from the shadows the historically covert financial operations of marijuana businesses.”
Thus far, banks have been hesitant to do business with the budding cannabis industry. Financial institutions are required to notify federal regulators of any “suspicious activity” on behalf of their customers, and banking has been a proverbial gray area for legal cannabis businesses.
As noted by CNBC, many legal cannabis businesses are forced operate as a cash-only establishment, a prime target for thieves and armed robbers. Officials say that the new guidelines should offer a solution.
US Government Issues Guidelines For Legal Cannabis Banking
As it stands, banks will be required to do their due diligence before accepting business from legal cannabis facilities. Specifically, banks must verify that the business is properly licensed, while gathering information about the type of products they sell and what part of the community they serve.
Further, banks must remain alert for any signs that their customers are operating outside of the law and forward such information to regulators. Any business suspected to have breached the DOJ guidelines released last year will be filed as a “marijuana priority.” In contrast, those that the banks deem reputable are to be filed as “marijuana limited.”
“We don’t see that guidance as giving banks a full green light to bank these businesses. We feel the only real and lasting solution is an act of Congress.” – Amanda Averch
Financial institutions have expressed concern in the past about operating dealing with legal cannabis businesses short of direct federal approval. Accordingly, bankers are calling for more to be done.
“We don’t see that guidance as giving banks a full green light to bank these businesses,” explains Amanda Averch, director of communications at the Colorado Bankers Association. “We feel the only real and lasting solution is an act of Congress.”
On the other hand we have Congressman Denny Heck (D-Wash), who believes that the banking industry will see the guidelines as the “go ahead” from federal regulators.
“The reality is that some bankers will do it and once some do, more will. So this is going to happen,” Rep. Heck said. “Some will come kicking and screaming, some will come readily, some won’t come at all. But we’re going to move in this direction because it’s the only thing that makes sense.”