U.S. regulators on Friday told banks they can allow marijuana dealers to open accounts, as states around the country begin to legalize the drug for medical and in some cases even recreational use.
Wary of being caught up in “drug money” crimes, banks had been reticent to have dealings with legal vendors of pot since the state of Colorado allowed its sale for recreational use in January.
But the US Treasury spelled out how banks could have dealings with the vendors without being hit with money laundering or other charges.
Noting that 20 states so far have legalized some aspect of marijuana use despite federal laws against it, the Treasury’s Financial Crimes Enforcement Network (FinCEN) said banks could work with licensed marijuana growers, processors and vendors.
FinCEN put the onus on the banks to make sure the clients stick to the confines of their licenses and adhere to any restrictions on their business, including Federal rules limiting what states could permit in legalizing marijuana, such as banning distribution to minors.
And banks will still be required to file “suspicious activity reports” if the bank suspects its client is breaking the law.
Licensed businesses involved in the pot trade in Colorado and other states have complained that banks and credit card vendors would not provide them services out of fear of legal trouble.
The new rules, FinCEN said, “promote greater financial transparency in the marijuana industry and mitigate the dangers associated with conducting an all-cash business.”
“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,” said FinCEN director Jennifer Shasky Calvery.
[Image via Agence France-Presse]