#cannabisindustry – “Federal anti-money laundering (AML) laws – including the Bank Secrecy Act (BSA) and its implementing regulations – are the primary impediment to banks serving the cannabis industry. These laws establish various recordkeeping and reporting requirements for national banks, federal savings associations, and agencies of foreign banks. Under the BSA, a financial institution must file a Suspicious Activity Report (SAR) when it knows, suspects, or has reason to suspect that a transaction involves funds derived from illegal activity. This would seemingly include any transaction involving funds derived from manufacturing, distributing, or dispensing cannabis, which is illegal under the federal Controlled Substances Act (CSA).
Nevertheless, federal regulators have set up an informal framework for banking cannabis through a series of guidance memoranda, which attempt to clarify when a bank must file a SAR regarding its cannabis customers. The first such memorandum came in 2013 when the Department of Justice issued the “Cole Memo.” In response to the Cole Memo and the growing number of states legalizing cannabis under state law, the Financial Crimes Enforcement Network (FinCEN) issued guidance that sought to “clarif[y] how financial institutions can provide services to marijuana-related businesses consistent with their BSA obligations” (FinCEN Guidance) in 2014.
The FinCEN Guidance requires that a financial institution engaging a cannabis-related business conduct substantial and, importantly, continuing due diligence to determine whether that business is (1) complying with state law, (2) interfering with any of the eight priorities listed in the Cole Memo, or (3) otherwise engaging in “suspicious activity,” including a list of “red flags” enumerated in the Guidance. Depending on what the institution uncovers in its due diligence, it must then file one of three cannabis-specific SARs and continue filing SARs throughout its relationship with the cannabis-related business.
Because the FinCEN Guidance is an informal guidance document that lacks the force of law, it does not immunize a financial institution from federal prosecution for banking cannabis. But many financial institutions have relied on it to provide banking services to cannabis companies. Indeed, 518 banks and 188 credit unions were providing such services as of December 2021. While those numbers seem substantial, many financial institutions have remained on the sidelines. As the American Bankers Association has explained, “without congressional action,” the “majority of financial institutions will not take the legal, regulatory, or reputational risk associated with banking cannabis-related businesses…”
#californiacannabis – “In response to a citizen initiative currently being circulated that looks to repeal Dana Point’s prohibition against cannabis retail operations, roughly two dozen people gathered on Monday night, June 20, to attend a town hall discussion regarding the impact of marijuana on the community.
Paul Wyatt, a former councilmember, moderated the panel that featured multiple speakers, including Foundry Treatment Center CEO Ben Cort, Family Medicine and Addiction Specialist Dr. Daniel Headrick and Scott Chipman, leader of San Diegans for Safe Neighborhoods….
The petition has until Aug. 12 to gather signatures from 10% of registered voters and receive verification by the Orange County Registrar of Voters to qualify for the upcoming General Election.”
#cannabisindustry – “The U.S. Supreme Court on Tuesday declined to take up a pair of cases concerning workers’ compensation for medical marijuana.
This comes about a month after the Justice Department encouraged the high court to reject the cannabis cases, in part because it argued that broader marijuana policy choices were better left up to Congress or the executive branch.
The new decision—denying certiorari—means that fewer than four justices felt the legal challenges merited consideration by the high court. It doesn’t necessarily mean that a majority agrees with lower court rulings in the disputes, however.”