The Obama administration Friday provided new guidelines to the banking industry aimed at making it easier for state-legalized marijuana businesses to have greater access to financial institutions.
In separate advisories issued by the Treasury and Justice departments, the administration’s action follows concerns expressed last month by Attorney General Eric Holder that legal marijuana operations were dealing largely in cash because banks feared that any relationship with the dealers put them at risk of prosecution under existing federal drug and money laundering statutes.
Twenty states and Washington, D.C., have legalized marijuana for medical use. Two of those states — Colorado and Washington — also have legalized marijuana for recreational use.
The guidance, similar to a Justice directive issued in August to address state laws that allow for medical and recreational marijuana use, advises banks that they likely could avoid federal law enforcement scrutiny if they submitted to eight specific conditions, including avoiding dealers that distributed marijuana to minors and those that directed revenue from marijuana sales to gangs and cartels.
While the Treasury advisory was directed to the banking industry, the separate Justice advisory was issued to federal prosecutors across the nation.
“This… guidance should enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses,” Treasury’s Financial Crimes Enforcement Network said in a written statement.
The Treasury advisory urged banks to conduct their own reviews to verify the legitimacy of the businesses that are required to be “duly licensed and registered” in their respective states.
Treasury also is requiring the banks to regularly file reports that outline their dealings with legitimate marijuana businesses and flag any contacts with suspicious dealers.