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Departments of Justice and Treasury Release Marijuana Banking Guidance

  • by Erik Altieri, NORML Communications Director February 14, 2014

    Today, the Department of Justice and the Financial Crimes Enforcement Network division of the Treasury Department released long anticipated guidance to banks and other financial institutions on how they can interact with marijuana businesses that are licensed under state law.

    Under current regulations, financial institutions are required to file suspicious activity reports when they suspect the transaction has a drug connection. The new guidance creates a three tiered system for these reports: marijuana limited, marijuana priority, and marijuana termination. This will allow these institutions to work with marijuana businesses as long as they were operating in accordance with state laws and regulations. The Department of Justice reserved the right to pursue criminal charges when they suspect businesses are breaking the guidelines they released late last year and would still require banks to report any activity they suspect to be as operating outside of state regulations.

    “Now that some states have elected to legalize and regulate the marijuana trade, FinCEN seeks to move from the shadows the historically covert financial operations of marijuana businesses,” noted FinCEN Director Jennifer Shasky Calvery in a press release. “Our guidance provides financial institutions with clarity on what they must do if they are going to provide financial services to marijuana businesses and what reporting will assist law enforcement.”

    “This reduces the burden on banks,” FinCEN stated during a briefing on the memo, “Marijuana under federal law requires a SAR. Now, the necessity is limited, reducing the banks’ burden a bit and more importantly clarifies where law enforcement focuses its attention.”

    While this is a good start when it comes to allowing marijuana businesses to operate the same as those in any other regulated industry, memos such as these can be ultimately overturned by future administrations. To make this change lasting and binding, Congress must now act to codify it into law. The Marijuana Business Access to Banking Act is currently pending before the House of Representatives and would do just that. You can click here to quickly and easily write your representative and urge him/her to support this important legislation.

    You can view the full text of the memo from FinCEN here. The DOJ memo can be viewed here.

    25 Responses to “Departments of Justice and Treasury Release Marijuana Banking Guidance”

    1. Don says:

      BAD DEAL!!!Only “Banks” will escape the wrath if the Fed`s should decide they want to go on a raiding Binge and seize ALL assets of everyone involved, DON`T FORGET – Cannabis is STILL listed as a Schedule I substance and I am afraid that all this will accomplish is to have all the money in one convenient place when the Fed`s decide to take it ALL Away, State Taxes you say? Have fun paying State And local taxes when they confiscate EVERYTHING you have under the Controlled Substances act and and then you are left owing a massive Tax bill, Then the IRS will calculate your sales and send a TAX bill for that TOO. NO, I WILL Not feel comfortable – And Nobody else should either- until it get`s Re-Classified or Eliminated from the Controlled Substances List, PERIOD!!!!

    2. devark says:

      Yeah, it needs to be off the controlled substances list now. I agree.

    3. Mr. Mitch says:

      Does this mean that banks will have guidelines that make lending money to marijuana businesses possible/easier? Would this make it much easier for an individual/group to start up a dispensary, if so?

      Correct me if I’m wrong, but haven’t the dispensaries in Colorado been holding their cash and using cash only payments? If the goal is to increase bank-dispensary compatibility will electronic payment be possible as well?

      Also, what other obstacles do dispensaries face with the banking system? What more action is needed to solidify this? And how much less of a burden would be lifted if rescheduling occurred?

      I’m also curious about the suspicion reports. The goal is to treat marijuana trade like any other legitimate business, but would bank institutions have to make any reports if say a company was operating alcohol or tobacco outside state regulations?

      Someone please enlighten me and give me your opinion.

      I can only hope that the right decisions are made from here on.

    4. Anonymous says:

      Sorry DOJ and FinCEN, try again. No business or bank in their right mind is going to proceed to do business with each other under these feeble guidelines. Get real, you’re so pathetic. Full legalization is inevitable at this point, you have to be a fool not to get that. So just give in and give up already fed gov’t, it’s only a matter of time. Every day of lost tax revenue from marijuana industry sales is gone forever, wise up, you, every state, and every bank need all the money you can get.

    5. bongstar420 says:

      Don, find an instance where the Supreme Court would actually hear a challenge to the Controlled Substances Act. You will not. They won’t actually try the law as it has no objective foundation. You see, it operates on a series of disproved facts that the court is aware of. Additionally, the authority to enforce the Controlled Substances Act is based on unprovable assumptions if you have not actually engaged in interstate commerce.

      I any case, the banks would be held just as liable given the circumstances you outlined as they would be documented participants. Additionally, the federal agencies charged with enforcement of the Controlled Substances Act have internal policies set by Supreme Court precedence that dictates non-action for amounts less than 100 plants or 100 pounds. I believe an annual clocking is the time frame for these amounts. At that rate, an individual can wholesale 75 lbs from 75 plants a year netting $90k annually without even eliciting a tick on the Fed’s radar according to their own internal policies set by Supreme Court precedent. Another way to put it is that a Federal agency will not bother with anyone below those numbers because the Supreme Court would not hear that case due to precedent that dictates the laws enforceability on that level (unless you were literally caught with merchandise in multiple states).

    6. Ray says:

      It’s another baby step. Full legalization will happen but this is painful to wait and watch.

      Maybe our government is afraid that they may have have to admit they made yet another mistake based on racial hatred. Yes, I’m talking about marijuana prohibition.

      By the way, Colorado didn’t burn in hell fire yet. If anything they are taking a stand for human compassion, dignity, and less government in our lives. Freedom must be fought for, it is never handed to you.

    7. Julian says:

      Yes, nullify the whole C.S.Act,… But in the meantime… THere are marijuana businesses dealing in cash… And did it ever occur to anyone what thus means for NORML PAC and marijuana investment firms?
      $$$$$$$$$$_\¡/_$$$$$$$$$$

    8. ANTON ROY says:

      CAREFULL….THE GOVERNMENT IS 2 FACED,AND WILL CATCH22 YOUR MONEY IF YOU LET THEM…..! DO NOT TRUST AN ORGANIZATION THAT HAS ALREADY SOLD US OUT TO CHINA….! WHERE IS ALL THE GOLD? THE FEDERAL GOVERNMENT HAS SOLD US OUT. PERIOD.

    9. nick says:

      The people of the United States of America and the Federal government need to recognize that the classification and scheduling of marijuana was signed into law back in 70 when one of the most corrupt presidents that didn’t even finish his term and a scrambled congress and senate from vietnam and protesters all the hippies so clearly this is so outdated as far as how the federal government looks at marijuana. This is a new century the taxed money the states can receive from marijuana businesses can clearly go to upgraded border patrol and security, healthcare and education. The publics opinion of marijuana clearly has changed from 40 years ago and studies on marijuana have proved to people that there is many uses to marijuana or hemp compared to alcohol even. The Controlled Substance Act doesn’t even makes absolutely no sense to me because how does a substance become a schedule 1 the worst of all and doesn’t even kill you. Clearly outdated.

    10. Don says:

      It seems to be that the Fed is baby stepping into legalization if you consider all the positive steps taken. They are setting up all “background” stuff so when weed is removed from sch 1 there wont be a lot of legal hurdles to jump over

    11. Wayne Fuchs says:

      All the government needs to do is remove ‘Marihuana” and “Cannabis” from the Schedule 1 list and be done with it. Prohibition is a failure, just look at the history of Alcohol Prohibition in this country…a major force in the repeal of the 18th Amendment were mothers whom had sons drawn into the black-market; this led to the 21st Amendment that abolished prohibition.

      The hypocrisy of this government is astounding when one looks at the history of marijuana in this country. In 1976, Randall v. United States, the federal court ruled in favor of Randall to use marijuana for his Glaucoma; this precipitated the government IND Program that allowed people to get marijuana delivered to them for medical reasons. This program was discontinued in 1992 and ceased taking new applicants; there are four people in the US that are still receiving marijuana that is grown in a US Government facility located in Oxford Mississippi.

      In 2003 The US Government, represented by the Health and Human Services(HHS), obtained a patent(#6630507) for certain Cannabinoids in marijuana as antioxidants ” to treat and cure” some medical ailments.

      The “War on Drugs” has been going on for more than 40 years, and 40 million arrests and a trillion dollars later we’re still seeing more drugs in this country than ever before. All it has done is enrich organized crime, corrupt politicians and law enforcement, and the Prison Industrial Complex.

      We now have 20 states, 2 of which now have recreational use, and the District of Columbia that have reformed their marijuana laws; these relatively new reformations are still in conflict with federal law.

      It’s time the federal government to legalize,tax, and regulate marijuana and put a stop to this schizophrenia.

    12. Ray Walker Jr. says:

      Move Cannabis to Schedule IV and that will solve so much. Debating these soon to be obsolete efforts is such a waste of time and money. People of all ages are suffering every where and we debate how banks need to be guided through these terrible time. Pathetic is the only word that fits

    13. nick says:

      I figured once marijuana decriminalization hit 25 states they would reschedule marijuana but I think they want some southeast states to hop on board and see how the whole legality of the bussinisses in Washington and Colorado do and see how to regulate it at that level before they see all the other 48 states jump to start selling it.

    14. Evening Bud says:

      This is very good news, IMO, notwithstanding the usual wary comments. While these guidelines are far from perfect, they are a step in the right direction. They show that even the Feds realize that it’s necessary to allow money obtained thru MJ sales to transact through banks.

      To those of you who believe this is terrible, I only ask, what if the Feds had said, “Hell no, MJ is illegal under federal laws, and we will not permit the industry to use the banks.” Some of you seem to forget that they VERY easily could have taken that position. There are still plenty of politicians around who oppose legalization. (I know, because I saw legislation to put MJ legalization on the ballot in my own state, NM, get stalled just this week.) So let’s take the good news as it comes. We haven’t won the war yet.

    15. Ray Walker Jr. says:

      @Evening Bud
      First let me say that in no way should my words be taken as anything but constructive. We’re all brothers in arms in this.
      The steps “We” and our Federal Government take are the building blocks to the future of Cannabis Law, and if not done properly will set the stage for us, the people, once again to suffer at the hands of the prohibition industrial complex. It needs to happen in a very specific way to rid us of the industrial complex.
      The scenario that begins with the Feds saying “Hell No”, is just what needs to happen. By the their own rules it is what they should do according to Federal Law. If these banks were given protection from prosecution while publicly moving money for Heroin, the outrage would trigger riots across the nation. And basically this is what they’re doing. Marijuana sits in the same classification as Heroin in the Controlled Substance Act.
      Our federal law makers are some of the best strategist to ever walk and you can rest assured that they ARE thinking ten steps ahead of where they think the battle is going. Above all, their prime directive is to keep Supreme Power and continue to support the prohibition industrial complex by keeping a winning game plan. They are avoiding the fight they might lose. If the Feds were to refuse the banks protection under federal law it would force the States and the Feds into a Supreme Court battle. This is where real change can happen.
      “Choose your battles wisely”, is the key. NORML and MPP are the shinning examples of this advice. Why do you think they both have done so well so far. The Controlled Substance Act is the Holy Grail for all of us. Promoting the fight to come center stage in the Supreme Court over the “Fundamental Right” under the Constitution to have access to Cannabis is wise.

      “Fundamental Right to Cannabis”

      That has a nice ring to it.

    16. This is GREAT news for the financial/business sector regarding new Cannabis businesses and dispensary start-ups. The future is bright and the Feds are slowly but surely coming around to the light, I do believe that full Federal legalization is coming a lot faster than most people expect. I’m really glad to hear of this new banking reform that is coming along swiftly.

      We have helped to pioneer the online landscape with valuable digital real estate in this Cannabis market, including many financial and credit related domains that have tremendous value and are some of the very best available anywhere – you can many of them currently listed for on MedicalCannabisDomains.com

    17. TheOracle says:

      This is a baby step, and true, a future administration, more likely a Republican than a Democratic one, could rescind the policies and sick the federal dawgz back on the cannabis community, but by that time there will be at least another state Washington, and possibly Rhode Island or more for stronger pushback for the feds to deal with, with their dwindling resources.

      I heard Treasury was in on this, but I’m still not clear about whether or not cannabis businesses will be allowed by the IRS to take the usual business deductions or not. I read the article in The Denver Post, and it does diligence to legal cannabis banking under the new guidelines, but I can’t tell if a medical marijuana or retail recreational cannabusiness will now be treated just as equally as a restaurant, widget maker or any other legal business.

      What does this mean for tax filing purposes? What does this mean for business deductions?

    18. Evening Bud says:

      @ Ray Walker Jr.,

      I have no problems at all with your argument that MJ should be rescheduled; it’s ludicrous that it is treated the same as heroin and other truly bad drugs. But, your reasoning about the banking situation notwithstanding, I believe that any step in the direction that will support our cause should be celebrated.

      Sure, MJ should be rescheduled. That’s a given. But the banks should also forced, coerced, whatever, to transact with MJ sales; especially these same banks that seem to have no problems transacting with heroin and other illegal drugs.

      I do have one question to you regarding the above. Couldn’t the same argument about rescheduling, and a future fight in the supreme court, be used in the banking situation as well? If not, please explain why. Thanks.

    19. Ray says:

      Do you realize that being famous can almost always get you thought of in the minds of anyone.

      So NORML that means you may be thought of by the President of the United States. (PING went the sound of a NSA computer)

      Mr President, give us a safer drug of choice. I had cancer so I don’t want cigarettes, alcohol is yummy but makes me angry sometimes. Cannabis stops my pain and makes me laugh.

      Norm, thank you, and thanks to your dedicated team.

    20. Ray Walker Jr. says:

      @Evening Bud
      Yes, you are right that I should celebrate the baby steps more than I do. Point taken.

      And yes I do think the banks should be made to respect any business without prejudice, but I think whats going on is that they’re not being forced to do anything. It looks like that they’re lobbying for a “get out of jail free” card, or a “get out of litigation free” card when the Feds or a change in election cycles bring old viewpoints back to power and the raids start back up.

      On the issue of the banks fighting in the Supreme Court, the banks will never have to go that far to get what they want, they never have. They’ll find a way through their lobby mechanisms(if thats what you’re asking).

    21. Denny Strausser Jr says:

      Until they reschedule marijuana, problems will arise eventually. They’ll decide to go after the banks, or something, in stated where it’s been made legal. They’ll probably also go after businesses because of improper filing of taxes. And also, for violating Federal Law. Sure they may have said they wouldn’t do this. But. It doesn’t stop them from going after laundered money makers.
      What ever the reason they use, they’ll try to get people for selling it in the two states they legalized it in. Maybe not arresting them directly for marijuana, going for other reasons.

      My point is already clear as day.
      They really need to reschedule marijuana on a federal level here. Leave States fully allowed to enforce their own laws on it… even if that means legalizing it.
      And actually, that might help states want to legalize then.

    22. Evening Bud says:

      @ Ray Walker Jr.,

      The banks are definitely dragging their feet. I can’t believe that greed won’t ultimately change their positions, however. Banks thrive on profit margins, and the reports coming out of Colorado show that there’s plenty of money to be had.

      I appreciate your acknowledging the “baby-steps.” I have a tendency myself to celebrate almost any good news, without, admittedly, always looking at the fine print. Still, I am overjoyed that things are generally proceeding in a positive manner, the bummer news coming out of California just yesterday notwithstanding.

      In the end, as you say, we are all brothers and sisters for the cause. Here’s hoping the banks will start playing ball, and that Obama or congress will pull their heads out and reclassify pot.

    23. Daniel Fain says:

      Its good news but we know that the truth always comes out after years of being harassed by the po po over minor possession of pot the prisons are so full they got a real problem Gee the people dont agree with the law because they know the truth maryjane is so fine and she makes me happy would be a shame to miss a good thing like maryjane

    24. Dave says:

      I don’t appreciate being called a pothead today I don’t call people alcohol head because they drink alcohol that’s it

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