DOJ Guidance to Banks On Pot Businesses May Fall Short


The Justice Department is drafting legal guidance to clarify how the banking industry can do business with newly legal marijuana businesses in Colorado, reports the Wall Street Journal. The planned memo won’t draw clear lines about what banks can and can’t do, but will emphasize that prosecutors’ priorities are to go after businesses that use local, retail marijuana sales as part of a larger criminal activity, such as diverting pot to states where it is still illegal, use the proceeds of such sales to fund illegal activity, or use the pot business as cover for other illegal activity.

That sort of framework isn’t likely to satisfy many in the financial sector, who have pushed federal agencies to draw clear lines for how to oversee bank accounts for businesses that sell marijuana legally under state law. Under federal law, simply accepting regular business deposits from a known marijuana seller is a violation of money-laundering laws. Banks are also required to fill out suspicious-activity reports for such transactions. “There’s a great deal of guidance that banks would want to hear about in terms of banking with these types of businesses,” said Richard Riese of the American Bankers Association. He added those concerns extend beyond just law enforcement agencies, to how regulators like the Federal Deposit Insurance Corp. might scrutinize such transactions. The issue came to a head at a meeting last month between representatives for major banks and law enforcement agencies.

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