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An excellent topic at the ABA Regulatory conference in June was “Banking a marijuana Related or CBD business” which featured Robert G. Rowe from the ABA,
Michael J. Bresnick with Venable LLP, Mark Haden from Colorado National Bank, and Jack N. Jacobson with Thompson Coburn LLP. They covered a lot of issues related to banking marijuana or CBD businesses. Here are just a few of the key takeaways:*Why you want to enter into a relationship with a marijuana or CBD business. (e.g. avenue for non-interest income, working with good customers, etc.). It should make sense.
*Evaluate risk – Industry Shadowing
*Set Up policies and procedures – create a business plan, conduct risk assessment, create policies and procedures, EDD is key:
Ongoing monitoring – daily basis comparing cash in to sales, monthly look at analytics/trending (how much sold, price/item, compare to history and peer groups)
*Look at the chain of cash custody (who are they buying from/doing business with – search for adverse news), reconcile deposits and sales, KYC (prove they aren’t criminal – legal docs, source of capital, ownership, etc.)
*If you bank MRB you have to be all in or all out – need a robust program…
*Be transparent = talk to your regulators and tell them your plans
*Be familiar with types of SARs required for MRBs – limited, priority, and termination. For indirect marijuana related business file regular SARs (Ft. 7 of FinCEN guidance.
*Legislation: SAFE Banking Act – Safe Harbor for Financial Institutions – does not address legality
STATES Banking Act – Federally legalizes cannabis sales for legitimate___
Mary Beth Guard will be doing a webinar for Compliance Resource on this topic on September 25. For more info or to register click here: https://mycomplianceresource.com/event-registration/?ee=256
businesses where states or tribes have legalized such sales, Greater certainty for financial institutions, but More difficult path to enactment
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