The General
New Member
Washington D.C. - Cannabis Cash" is the new buzzword in US banking circles with the Obama administration last week giving approval for banks to do business with legal sellers of marijuana. The move will benefit not only the sellers of recreational marijuana in the states of Washington and Colorado but also sellers of medical marijuana across 20 states and the District of Columbia.
Dealing in the Dark
The approval from the federal government was needed because of the fuzzy legality of marijuana transactions, even in states where it is legal. Technically under federal law, sale of Marijuana is still illegal, but the country's federal structure allows the states considerable latitude even as outside observers scratch their heads at this bizarre arrangement.
The feeling of befuddlement is also shared by the banks. The new measures do not give banks immunity in dealing with legal marijuana businesses--who deal with their customers almost exclusively in cash. There is an omnipresent possibility that money launderers may try and use such businesses and prosecutors would then go after the banks who accept deposits from these businesses. Therefore, both banks and marijuana businesses want the federal law to be amended so that business can be done out in the open, without fear and doubt.
Branching Out
Banks who want to venture into unknown waters, and take advantage of the broader trend of increased acceptance of recreational marijuana, must comply with a detailed set of guidelines issued by the Financial Crimes Enforcement Network (FinCEN). Most important is the Suspicious Activity Report (SAR) filing that the FinCEN insists on from every bank. Banks must assess whether the entities they are dealing with have been licensed by state authorities, what is the normal business activity for such customers, and what kind of marijuana products are being sold by these businesses.
In case banks notice suspicious activity they are expected to red flag these in priority SARs and if they are convinced their customers are up to no good, an SAR notifying termination of the banks relationship with that customer should be filed post haste. Watching with interest how the new measures go down will be investors, looking to cash in on the anticipated boom in marijuana businesses--some estimates have the industry top $10 billion in five years. With the partial relaxations on the banking front, let's see if it leads to a pot of gold for investors.
News Moderator - The General @ 420 MAGAZINE ®
Source: Allvoices.com
Author: Preetamkaushik
Dealing in the Dark
The approval from the federal government was needed because of the fuzzy legality of marijuana transactions, even in states where it is legal. Technically under federal law, sale of Marijuana is still illegal, but the country's federal structure allows the states considerable latitude even as outside observers scratch their heads at this bizarre arrangement.
The feeling of befuddlement is also shared by the banks. The new measures do not give banks immunity in dealing with legal marijuana businesses--who deal with their customers almost exclusively in cash. There is an omnipresent possibility that money launderers may try and use such businesses and prosecutors would then go after the banks who accept deposits from these businesses. Therefore, both banks and marijuana businesses want the federal law to be amended so that business can be done out in the open, without fear and doubt.
Branching Out
Banks who want to venture into unknown waters, and take advantage of the broader trend of increased acceptance of recreational marijuana, must comply with a detailed set of guidelines issued by the Financial Crimes Enforcement Network (FinCEN). Most important is the Suspicious Activity Report (SAR) filing that the FinCEN insists on from every bank. Banks must assess whether the entities they are dealing with have been licensed by state authorities, what is the normal business activity for such customers, and what kind of marijuana products are being sold by these businesses.
In case banks notice suspicious activity they are expected to red flag these in priority SARs and if they are convinced their customers are up to no good, an SAR notifying termination of the banks relationship with that customer should be filed post haste. Watching with interest how the new measures go down will be investors, looking to cash in on the anticipated boom in marijuana businesses--some estimates have the industry top $10 billion in five years. With the partial relaxations on the banking front, let's see if it leads to a pot of gold for investors.
News Moderator - The General @ 420 MAGAZINE ®
Source: Allvoices.com
Author: Preetamkaushik
