Banks navigate hazy regulations to serve cannabis businesses
Many financial institutions looking to offer banking services to the expanding number of legal cannabis growers and distributors in the U.S. are still limited by spotty regulations and expensive compliance efforts.
The disparities between federal and state laws governing the use of marijuana and hemp, and the differences across states, are inhibiting banks from stepping into what has become a lucrative and legal business in many areas. Regulators have issued scant guidance and some of the existing advisories are outdated or set few clear obligations for banks, such as information that a bank should ask for from potential clients, financial institutions say.
Some financial institutions have created their own internal guidelines—from database tracking of a plant’s life cycle to old-fashioned site visits—so that their risk profile remains low and they remain in compliance with the broad intent of the wide swath of state and federal laws.