Buzzkill: The AML Implications Of Banking Marijuana-Related Businesses

Federal law prohibits the manufacture, distribution, and possession of marijuana and financial transactions associated with such activities. Nonetheless, 34 states, as well as the District of Columbia, Guam, and Puerto Rico, have legalized the sale of marijuana to some degree, and overall sales of legal cannabis within the U.S. reached $10.3 billion by the end of 2018 and are expected to reach $17 billion by the end of 2020. Despite this state-level move toward legalization and the vast size of the market, most financial institutions remain reluctant to conduct transactions involving marijuana proceeds or marijuana-related businesses (“MRBs”), although that too is changing. This article discusses the unique legal and compliance risks associated with providing financial services to the marijuana industry and recommends specific controls to mitigate the identified risks.

Reprinted with permission from The Review of Banking and Financial Services, September/2020

Copyright © 2020 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.