Banking Issues in the Cannabis Industry: Managing Risk Under State and Federal Law

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Tuesday, November 5, 2019

Recorded event now available

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Program Materials

This CLE webinar will examine banking issues presented by the conflict between the legalized use of marijuana in various states and its treatment as a controlled substance under federal law. The panel will discuss regulatory and enforcement risks associated with financing and taking deposits from marijuana-related businesses (MRBs), and best practices for mitigating those risks. The panel will also discuss proposed legislation which could legalize certain banking activities with cannabis businesses.


Medical marijuana remains entirely illegal in only 12 states, and recreational use is legal in nine states and Washington, D.C. Marijuana remains illegal at the federal level under the Controlled Substances Act (CSA). Many financial institutions won't provide banking services to MRBs due to this conflict between state and federal laws. Bank counsel must be able to navigate the regulatory complexities created by this conflict in advising banks doing business with MRBs.

Banks face inconsistent regulatory approaches taken by different administrations and different federal agencies. On Feb. 14, 2017, FinCEN issued FIN-2014-G001 to clarify how financial institutions can provide services to MRBs and sets forth reporting requirements, including marijuana suspicious activity reports (SARs). On Jan. 4, 2018, the Attorney General rescinded the Cole Memo, which correlated to FIN-2014-G001, but the Treasury Department subsequently indicated that FIN-2014-G001 remains in place.

Before taking deposits or transacting business with MRBs, financial institution counsel must understand the relevant Bank Secrecy Act and anti-money laundering (AML) issues and must fully comply with federal Know Your Customer (KYC) requirements. Lending to an MRB is risk-inherent because cannabis is a Schedule I drug under the CSA; enforcement rights for lenders may be curtailed by limiting loan enforcement remedies only to state law and in state court.

The SAFE Banking Act, bipartisan legislation currently before Congress, would allow banks to provide access to checking accounts, loans, electronic banking, and other financial products to cannabis businesses that are operating in compliance with state law. It would not, however, change the status of cannabis as a Schedule I controlled substance.

Listen as our authoritative panel discusses these and other issues confronting banks that propose to take deposits or provide financing to MRBs. The panel will also discuss steps for banks and other financial institutions to avoid regulatory pitfalls and workarounds to resolve enforcement risks.



  1. Legalization of cannabis at the state level: current status
  2. Federal regulation
    1. Controlled Substances Act
    2. FIN-2014-G001 and the Cole Memo
    3. DOJ vs. Treasury pronouncements
  3. Doing business with MRBs
    1. Reporting requirements under FIN-2014-G001: SARs
    2. Compliance with AML and KYC requirements and the Bank Secrecy Act
  4. Enforcement issues
    1. May be limited to state-level remedies
    2. Issues in bankruptcy: federal jurisdiction


The panel will review these and other high priority issues:

  • How have banks reacted to the legalization of cannabis in various states given its treatment as a controlled substance at the federal level?
  • What were the safe harbors provided under FIN-2014-G001 and the Cole Memo and how have policy pronouncements by the new administration effected them?
  • What concerns should MRB lenders have in regard to remedies given the illegal nature of the underlying collateral under federal law?
  • Why is compliance with AML and KYC requirements especially important before taking deposits from MRBs?


Bitan, Oren
Oren Bitan


Mr. Bitan has an extensive legal background that includes business, real estate, banking, receivership, consumer...  |  Read More

Elster, Aaron
Aaron Elster


Mr. Elster represents developers, lenders, investors, landlords, and tenants on a variety of real estate transactions,...  |  Read More

Hosack, John
John L. Hosack


Mr. Hosack focuses his transactional practice on commercial real property loan documentation, loan workouts, REO sales...  |  Read More

Rodriguez, Enrique
Enrique (Rick) Rodriguez, Jr.

Founder and Principal
Rodriguez & Associates

Mr. Rodriguez is a qualified expert in banking and real estate matters and for the past 17 years has provided a wide...  |  Read More

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