The Financial Crimes Enforcement Network, a branch of the U.S. Department of Treasury, on Friday issued a seven-page guidance for how banks should approach working with legal marijuana businesses. Here are highlights of that directive.
• Banks must continue to file Suspicious Activity Reports for any transaction it does with a legal marijuana business.
• SARs are to be distinguished as marijuana or not.
• There are three types of SARs for marijuana:
a) Marijuana limited (business does not violate any law or any federal priorities concerning drug activity)
b) Marijuana priority (business appears to violate one of the federal priorities)
c) Marijuana termination (bank ends relationship with business to comply with anti-money laundering rules)
• Red flags that require a SAR filing include:
– Business gets too much revenue than reasonably expected
– Business can’t adequately prove where all revenue derives
– Business moves funds rapidly
– Business commingles funds excessively
– Business cash deposits smell like marijuana
– Business is close to a school
• Currency transaction reports on deposits or withdrawals greater than $10,000 remain in effect.
Source: FinCEN
