Filings Show Banks Working With Legal Marijuana

penny-stocks.jpgBanking has remained one of the setbacks for marijuana entrepreneurs. When federal law is still not in favor of cannabis, banks and other financial institutions are generally hesitant to provide their services to cannabis businesses.

But a recent Wall Street Journal article indicates that many banks are actually working with companies in the marijuana industry.

According to the article, more than 1,700 reports of “marijuana limited” suspicious activity have been filed by banks since the federal government issued financial guidelines last year. A so-called “marijuana limited” report is one that involves a company belonging to the cannabis industry but is not violating state law or any Cole Memo priority enforcement area.

In addition to these, banks also filed some 1,300 “marijuana termination” reports to the Financial Crimes Enforcement Network (Fincen). A “marijuana termination” report means that a bank has ended its relationship with a cannabis company.

Even more, about 313 “marijuana priority” reports were filed. These reports indicate that certain companies may have had activities that violated state law or the Cole Memo.

This news ironically comes on the heels of MBank’s announcement that it will no longer serve cannabis-related accounts. The bank handles 70 to 75 legal marijuana business accounts, which it will close due to high compliance costs.

Although the general banking landscape is largely unaccommodating to cannabusinesses, some banks, especially local ones, have been offering financial services, if only on a limited basis. These banks mostly have prior relationships with those customers. Credit unions that particularly serve marijuana businesses have also been cropping up in several places.

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