Deciding not to bank cannabis-related businesses doesn’t mean organizations are exempt from risk exposure.
Financial services organizations in states where cannabis has been legalized have to decide whether to bank cannabis-related businesses (CRBs) now, wait to do so until all cannabis becomes federally legal, or not bank them at all. Even in states where cannabis is legal, processing cannabis-related funds could be deemed as criminal activity and money laundering, and financial services organizations could be found in violation of the Bank Secrecy Act (BSA) for not reporting cannabis-related transactions.
Some cannabis is federally legal, for example hemp and hemp-derived CBD, while other types of cannabis remain federally illegal. Now is the time for financial services organizations – especially banks and credit unions – to evaluate how they are responding to the changing landscape. Specifically, organizations should analyze their risk exposure to effectively identify and manage any cannabis-related risks.