According to FinCEN, “The guidance provides that financial institutions can provide services to marijuana-related businesses in a manner consistent with their obligations to know their customers and to report possible criminal activity.”
The memo is designed to ease the concerns of some banks but doesn’t change the law or provide real legal guarantees to financial institution. As a result it is likely many banks will continue to refuse to do business with marijuana companies.
As long at this is enough to assure even a few small local banks or credit unions it will make a real difference. Access to any banking should take care of many of the big problems caused by forcing them to be all-cash operations.
Under the guidelines banks would still have to file “suspicious activity reports” for financial transactions for marijuana businesses they have accounts for, but there will now be two separate categories. If the business is following state law and not violating the the “Cole Memo priorities” the bank can file a very basic “Marijuana Limited” SAR. On the other hand if the bank believes the business is in violation of state law or behaving inappropriately, they would file a more detailed “Marijuana Priority” SAR. Presumably the federal agencies would mainly focus on investigating SARs in the second category.
Jon Walker is the author of After Legalization: Understanding the future of marijuana policy
Photo by MIT-Libraries, used under Creative Commons license