Marijuana Banking Takes Massive Leap Forward
Last month witnessed a marijuana banking explosion. Spanning 29 states and generating $7.2 billion in 2016, the United States' legalized marijuana industry's greatest obstacle—banking—was significantly reduced by the Department of the Treasury's (Treasury) Financial Crimes Enforcement Network's (FinCEN) June 6, 2017, "marijuana banking update," The Fourth Corner Credit Union v. Federal Reserve Bank of Kansas City, No. 16-1016 --- F.3d ---- (10th Circuit, June 27) landmark opinion, and rise of the interbanking systems alternative to the barred use of credit cards in marijuana sales.
July 13, 2017 at 05:37 PM
17 minute read
Last month witnessed a marijuana banking explosion.
Spanning 29 states and generating $7.2 billion in 2016, the United States' legalized marijuana industry's greatest obstacle—banking—was significantly reduced by the Department of the Treasury's (Treasury) Financial Crimes Enforcement Network's (FinCEN) June 6, 2017, “marijuana banking update,” The Fourth Corner Credit Union v. Federal Reserve Bank of Kansas City, No. 16-1016 — F.3d —- (10th Circuit, June 27) landmark opinion, and rise of the interbanking systems alternative to the barred use of credit cards in marijuana sales.
While still only a fraction of nation's 11,954 regulated banks and credit unions provide marijuana-related businesses (MRBs) with financial services, this recent 22-percent increase in financial institutions reflects a staggering growth and proof that a cost-effective solution exists to dealing with bankings' thorniest issue: profitability in light of compliance and suspicious activity reports (SARs) requirements.
|Marijuana Banking Law and Regulation
Because the Comprehensive Drug Abuse Prevention and Control Act, 21 U.S.C. Sections 801, Et. Seq (1970) (CSA) prohibits “manufacture, distribution and dispensation” and any transfer or deposit of monies yielded from cannabis sale may be deemed “money laundering” in violation of the Currency and Foreign Transactions Reporting Act, 31 U.S.C. Section 5311-5330 (BSA), most banks, credit unions and credit card companies (hereafter, collectively referred to as financial institutions) refuse to provide marijuana growers, processors or dispensers with financial services.
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