Legality of Marijuana Money and Banks
Written by Moses & Rooth on September 26, 2017
Marijuana is now legal for medical and/or recreational use in 29 states and the District of Columbia. While marijuana is legal at the state level, it’s still a federal crime. This causes not only confusion in the cannabis industry, but it opens the door to myriad complexities as well.
Banks are regulated by the Federal Deposit Insurance Corporation (FDIC), which was created by Congress. Due to federal oversight, most banks are refusing to handle money created by the medical marijuana industry. They are not willing to fill out disclosure reports, which became a requirement under President Obama. There is also a fear that President Trump’s administration— which is anti-drug— may seize assets and prosecute bank employees.
One bank, however, is bravely going where no bank has gone before. First Green Bank—based in Orlando—is the only financial institution in Florida that is willing to serve the pot industry.
Founded in 2009, First Green Bank originally focused on the environment, providing loans on green construction, solar systems and electric cars. Now, the bank is focusing on a different type of green—marijuana.
Of Florida’s seven medical marijuana businesses licensed by the state, First Green Bank serves six. Five more have just opened and another five are expected to appear in the next few months. First Green Bank hopes to capture the entire market by the fall. The bank will also focus on physicians and attorneys.
First Green Bank works by taking the cash from the patient—no credit cards are allowed—and shipping it to a Federal Reserve vault through an armored pickup service. The bank never touches the cash, and the arrangement meets certain requirements so the bank is not accused of money laundering.
The federal government isn’t totally in approval of the bank’s activities, though. The officers of First Green Bank sought guidance from the Florida Office of Financial Regulation as well as the FDIC. Those agencies pointed to information provided by the Justice Department. It states that banks are required to file reports of marijuana transactions and label them as “suspicious activities.”
In the United States, just 368 financial institutions are serving the marijuana industry. However, some are having second thoughts after learning about the suspicious activity reports. However, because only a select few companies can be licensed to dispense, reporting is much easier.
But there is also the issue of the high costs of serving the accounts. It will be difficult for banks to make money off of marijuana. In fact, First Green Bank has not made any money as of yet.
Need Help With a Florida Drug Case?
While medical marijuana is legal in Florida, there are still many legalities involved when it comes to drugs. The fact that marijuana is still not legal at the federal level makes things even more complicated.
If you are charged with a drug crime, get legal representation. The Florida criminal defense attorneys at Moses & Rooth, Attorneys at Law can provide you with a solid defense. Contact us today at (407) 377-0150 to schedule a free consultation.