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With the congressional effort to remove federal restrictions on marijuana banking still ongoing<\/a>, a coalition of financial institutions has released new guidance for cannabis businesses trying to secure banking services.<\/p>\n While compliance can be onerous compared to banking for most businesses, the report published on Monday by the Cannabis Industry Financial Group (CFIG) says it\u2019s nevertheless possible for the marijuana industry to obtain above-board, reliable financial services without waiting for passage of the Secure and Fair Enforcement Regulation (SAFER) Banking Act.<\/p>\n \u201cWhile conflicts between federal and state cannabis policies remain, some financial institutions have chosen to offer banking services to state-legal cannabis related businesses (CRBs),\u201d the guidance says. \u201cIf done properly, in a highly compliant manner in accordance with Financial Crimes Enforcement Network (FINCEN) guidance and in open cooperation with financial regulators, financial institutions can permissibly serve the state legal cannabis industry without adverse action and enforcement.\u201d<\/p>\n The document, \u201cKeeping Your Accounts Safe & Sound: A Guide to Selecting a Financial Institution with a Strong Cannabis Banking Program,\u201d comes on the heels of advice CFIG offered in July to banks and credit unions looking to service the state-legal marijuana industr<\/a>y.<\/p>\n This resource aims to provide the insight needed to help those in the state-legal cannabis industry better navigate a successful and compliant banking relationship that protects their accounts & livelihoods.<\/p>\n \u2014 CFIG (@CannabisFIgroup) December 5, 2023<\/a><\/p>\n<\/blockquote>\n\n \u201cGiven the continued growth of state legal cannabis operations and the importance of CRBs having access to banking services for safety and soundness,\u201d the new report says, \u201cthis document seeks to help CRBs understand the requirements financial institutions have in place if servicing businesses and businesses involved, either directly or indirectly, in the state legal cannabis industry.\u201d<\/p>\n First, the guide says, potential cannabis clients should understand that onboarding marijuana businesses can be daunting for banks, which are required to engage in so-called Know Your Customers procedures, follow anti-money laundering requirements and file suspicious activity reports (SARs) around cannabis-related transactions.<\/p>\n \u201cAlthough FINCEN guidance exists relating to the filing of SARs, the guidance does not prevent prosecution for violations of federal law,\u201d it notes.<\/p>\n The bulk of the new guide is about ensuring businesses ask the right questions when seeking financial services\u2014and ensuring institutions are asking the right questions of potential clients.<\/p>\n It advises operators to ensure that institutions service their particular type of business, specifically with regard to what it calls Tier 1, Tier 2 and Tier 3 business. As the CFIG report describes, Tier 1 businesses are plant-touching, while Tier 2 and Tier 3 businesses derive more or less than 50 percent, respectively, of their revenue from plant-touching companies. It adds that institutions \u201ctypically also differentiate between the type<\/em> of Tier 1 business (i.e., cultivation vs. retail).\u201d<\/p>\n The document also encourages would-be clients to ask how long the institution\u2019s marijuana banking program has been in place\u2014assuming one is in place at all. \u201cThe onboarding process for cannabis banking is time intensive due to the need for enhanced due diligence,\u201d it says, \u201cand if a bank does not yet have an established program with compliance mechanisms and staff in place, this can create a longer timeline for onboarding.\u201d<\/p>\n \u201cFurthermore,\u201d the guide continues, \u201cif an FI [financial institution] does move forward with a client before compliance mechanisms are in place, the client is at risk of their funds not being appropriately handled that could threaten their operations, licenses, and ultimately, legality. Without proper programs in place, banks run the risk of commingling funds, opening them up to potential implications of money laundering and asset forfeiture.\u201d<\/p>\n The guide also advises potential clients to ask whether the institution has \u201cgone through a regulatory exam\u201d and what the outcome was. \u201cJust as the FI wants to know your house is in order before engaging with your business,\u201d it says, \u201ca successful exam demonstrates that the FI has their house in order.\u201d<\/p>\n And, of course, ask what banking services the institution can provide\u2014including to workers at marijuana businesses. \u201cMake sure your FI relationship also extends to your employees and that they will also have access to financial resources,\u201d the report says, \u201cfrom payroll to checking accounts to personal loans that are too often denied to workers that receive a paycheck tied to cannabis.\u201d<\/p>\n In terms of what businesses should expect to be asked by a financial institution, CFIG says banks should ask for a state-issued cannabis license; business documentation, such as tax ID and registration; financial documentation, like balance sheets and income statements; and operational information, such as an organizational chart, statement of ownership, payroll list and other details.<\/p>\n \u201cCRBs should not enter into a banking relationship with an FI that does not engage in such due diligence,\u201d the advisory says, \u201cas that program is most likely not on the up-and-up \u2013 exposing you and your business to serious risks.\u201d<\/p>\n After enrolling as a client, CFIG said, it\u2019s also important to maintain the business relationship by monitoring to ensure the bank is transparent and stays on top of regulatory issues.<\/p>\n The guide<\/a> notes that it\u2019s not intended to be legal advice and should not be relied upon as such. \u201cNone of the recommendations in this document can protect one from potential federal enforcement actions due to the contradiction between federal and state cannabis laws,\u201d a disclaimer says, \u201cbut are rather intended to help those with direct or indirect ties to state legal cannabis operations to be better informed in choosing a financial institution.\u201d<\/p>\n Meanwhile, legislation is pending at the federal level that would remove major banking restrictions for the cannabis industry.<\/p>\n Senate Majority Leader Chuck Schumer (D-NY) said last month that bringing the Secure and Fair Enforcement Regulation (SAFER) Banking Act to the floor is a now matter of securing more GOP votes. Schumer said that task is made more difficult by the fact that some lawmakers are afraid that their constituents, \u201cparticularly the older ones,\u201d don\u2019t want them to embrace reform despite overall majority voter support.<\/p>\n \u2014 Regardless of broad support from voters, the majority leader said modest cannabis banking legislation that cleared the Senate Banking Committee<\/a> in September is still being held from the floor as senators work to assembly a firmer bipartisan coalition.<\/p>\n \u201cIt\u2019s bipartisan. It has support in the House. We could make it law soon,\u201d Schumer said, without giving a specific timeline for floor consideration in his chamber.<\/p>\n That perspective appears to depart from that of the lead GOP sponsor of the SAFER Banking Act, Sen. Steve Daines (R-MT), who has maintained that enough of his Republican colleagues in the Senate are already prepared to advance the bill on the floor.<\/p>\n The key question at this stage, Daines has suggested, is whether the measure has enough support to pass the House<\/a>. He said last month that senators are working with their House counterparts \u201cto get alignment between both of the chambers.\u201d<\/p>\n Veterans Groups Ask Biden To Ensure Marijuana Scheduling Review Is Completed In \u2018Timely Manner\u2019 And Push For Broader Reform<\/a><\/p>\n<\/blockquote>\n\n Photo courtesy of Chris Wallis \/\/ Side Pocket Images.<\/em><\/p>\n The post Trade Group Offers Guidance To Marijuana Businesses On How To Find Banking Services Amid Federal Prohibition<\/a> appeared first on Marijuana Moment<\/a>.<\/p>\n
With the congressional effort to remove federal restrictions on marijuana banking still ongoing, a coalition of financial institutions has released new guidance for cannabis businesses trying to secure banking services. While compliance can be onerous compared to banking for most businesses, the report published on Monday by the Cannabis IndustryContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":24,"featured_media":70753,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1335,18],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/70752"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=70752"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/70752\/revisions"}],"predecessor-version":[{"id":70754,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/70752\/revisions\/70754"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media\/70753"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=70752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=70752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=70752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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\nRead More: Trade Group Offers Guidance To Marijuana Businesses On How To Find Banking Services Amid Federal Prohibition<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"