Over the past several years, cannabis reform has swept the country. To date, marijuana is legal for recreational use in 11 states and medicinal use in 33 states. The trend is expected to continue. Two market research companies, Arcview and Greenwave, are predicting that the cannabis industry’s revenues will exceed the National Football League’s revenues in 2020. Nevertheless, a majority of depository institutions refuse to offer services to marijuana-related businesses.
Cannabis is a Schedule I narcotic under the Controlled Substances Act of 1970. It is a federal crime to grow, possess or distribute cannabis under federal law even if legal under state law. It is a federal crime under the Money Laundering Control Act (“MLCA”) to knowingly conduct or attempt to conduct a financial transaction with the intent to promote the carrying on of a “specified unlawful activity.” Any person who violates the MLCA may be fined up to $500,000 or twice the value of the property involved in the transaction and/or imprisoned for up to 25 years. In other words, depository institutions, officers, directors and employees who knowingly accept proceeds from state legalized cannabis activities risk violating the MLCA.
This article first appeared on the Credit Union Journal's website on January 28, 2020. To read the full article, please visit Credit Union Journal.