Today, the Federal Government (through the Department of Treasury and the Department of Justice) issued two memos (see below) which essentially give the green light to banks accepting business and engaging in financial transactions with marijuana-related businesses operating in states that have either a legal/commercial marijuana structure (Colorado and Washington), or have a medical marijuana structure.
It is a federal crime for banks to accept deposits and do business with marijuana businesses because the proceeds are derived from activity (marijuana) made illegal by the federal Controlled Substances Act. It can constitute money laundering and a violation of other banking regulations for the bank. Because of that, most banks have refused the business.
Today, however, the Feds removed a major obstacle. Although the federal guidance from the DOJ and Treasury Department does not change the fact marijuana-related banking remains illegal and theoretically subject to criminal prosecution (that would require federal legislation or rescheduling of marijuana), it basically says that if banks follow certain protocols, and conduct specified due diligence with prospective marijuana business customers, they are unlikely to face criminal prosecution. This mirrors the guidance offered by the DOJ in August 2013 with regard to marijuana businesses generally, when the DOJ said that the Feds would not use their limited resources to prosecute marijuana businesses operating in States that have a regulatory scheme that addresses stated federal concerns and enforcement priorities.
The guidance today is a welcome first step, although it may not remove practical impediments to banks accepting marijuana business activity, particularly in California. That is because the California legislature has yet to move forward with legislation creating a structure for the Statewide regulation and licensing of
medical collectives and dispensaries. Hopefully, the banks will create some momentum in Sacramento for that to happen now that the Feds have sent this positive signal.
14_0214_DOJ Memo re Marijuana-related financial crimes