Legal Cannabis and Banking

[Ghel]

Recreational Cannabis was legalized here in Minnesota beginning yesterday. I don't want to get into the politics of that, just how it affects banks, like my workplace.

Luckily, I guess, we have around a year to work that out, since that's how long the process for the state to license dispensaries is expected to take. (The only dispensary currently selling legally is on Red Lake Nation land, though the news suggests other tribes may be added to that list soon.) My branch manager brought it up in a meeting yesterday. He's concerned about how to handle accounts for businesses that sell cannabis-related products. Since we're a federally-regulated bank, and marijuana is still illegal federally, we're not sure how regulators are going to view it if we open a checking account for a dispensary, for example.

If marijuana were still illegal and we suspected a customer was selling it, we would be required to file a Suspicious Activity Report. But if it's legal here, and a customer is openly selling it (like, not trying to hide it), do we still need to file a SAR? It's still illegal federally, so I think a lot of people would say yes. But the feds aren't going to want a bunch of SARs filed that they aren't going to follow up on, since the feds have said they won't pursue charges against people who possess or sell marijuana in states that have legalized it.

We've already run into this a bit, with the legalization of THC edibles and drinks. A couple of our customers are selling those products in addition to their regular wares. So far, we have just been ignoring that and taking deposits as if they were part of the customer's normal business. But what are we going to do if a dispensary wants to open up in town and open a checking account with us? I guess we'll cross that bridge when we come to it.

[Nunavut Pants]

And that, allegedly, is why the executives make the Big Bucks. To make those kinds of hard decisions.

[Ghel]

That "allegedly" is doing a lot of work there. Our main branch is in another state (one without legal weed), and they often forget that the laws are different in our state. Often vastly different. We have to remind upper management that we're in a much more liberal state, and even then, they frequently don't do anything until an easily foreseen circumstance happens. It's super frustrating.

[csquared]

Fill out the SAR and let the Feds deal with it.

[Ghel]

That seems reasonable to me, but SARs have to be approved by management, who likely won't do it. They didn't even want to file SARs when our local headshop was bringing in huge deposits of cash (though not quite enough to file a CTR, which may have been structuring, too). They said they had no reason to believe they were actually doing anything illegal. Really. At the sketchy as hell headshop. Our head teller tried to argue it, but got nowhere.

[EricKei]

Speak with your most intelligent/reasonable member of management and ask them about putting together a letter to the company's legal department about this. It might encourage them to go along with it if a) you volunteer to write it and let them add stuff, b) have them put their name on it as the "author," and c) that this would help to prevent serious legal liability for the bank. Make sure the info request specifically calls out your own state specifically. You want an official policy response in writing.

[csquared]

That seems reasonable to me, but SARs have to be approved by management, who likely won't do it.

As I understand the law, only the top dogs will be given the matching chrome bracelets. Fill out the form and let manglement reject it.

[Slave to the Phone]

It has been legal in AZ for several years. Due to MJ still being a federal crime, none of the dispensaries here (or CA or Nevada) take plastic, it is cash only. Last year they were able to bring ATMs in so people can get cash to buy their weed, I have used these machines in the past and the transactions don't say they were done at the dispensary, they say the address only.