Twenty-three states and the District of Columbia now permit the use and possession of marijuana to some degree under state law, and public support for legalization is at an all-time high. Despite the growing number of states legalizing marijuana, however, it remains a Schedule 1 controlled substance under the federal Controlled Substances Act (CSA). President Trump’s appointment of Alabama Senator Jeff Sessions, a long-time cannabis critic, as attorney general, brings even more uncertainty to currently hazy federal enforcement efforts. For banks and other financial institutions interested in providing loans or other banking services to the “legal” marijuana industry, the current federal prohibition and related regulatory challenges continue to result in risks that most institutions will find too high to overcome.
Federal Law and Current Guidance.
Because the manufacture, distribution, and dispensation of marijuana remains illegal under the CSA, banks and other financial institutions providing services to marijuana-related businesses risk violation of federal anti-money laundering statutes (18 U.S.C. §§ 1956 and 1957), the unlicensed money-remitter statute (18 U.S.C. § 1960) and the Bank Secrecy Act (BSA). These statutes can impose criminal liability for engaging in certain financial and monetary transactions with the proceeds of a “specified unlawful activity” and for …