Reefer Madness - New Treasury Guidance for Banks Providing Financial Services to Marijuana Sellers
On February 14, 2014, FinCEN released new guidance seeking to clarify how financial institutions may provide services to marijuana-related businesses. Also on February 14, the Department of Justice issued complementary guidance to federal prosecutors for determining whether to charge individuals or institutions that engage in financial transactions involving proceeds from marijuana-related businesses.
The guidance documents follow the recent legalization of marijuana sales in Colorado and Washington. Because selling marijuana remains a federal crime under the Controlled Substances Act, financial institutions that provide services to marijuana-related businesses risk violation of federal anti-money laundering statutes, the unlicensed money remitter statute, and the Bank Secrecy Act. Financial institutions considering doing business with marijuana-related businesses should be aware of the substantial legal risks.