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Marijuana Banking: What You Need to Learn About Purchasing the Marijuana Industry
Marijuana is now legal in a variety of U.S. states, and in many cases, fully legal.

The marijuana industry is estimated to be worth $50 billion by 2020. With the huge development of this industry comes a requirement for banks to step up and provide monetary services to the marijuana organization.

In this article, we'll talk about whatever you require to know about the Cannabis Banking Compliance Act, or H.R. 689. This costs, which was initially presented in January 2019, would require financial institutions to work with cannabis-related organizations as a legal business entity. We'll likewise discuss the other marijuana banking issues you need to understand about.

What is the Cannabis Banking Compliance Act?
The Marijuana Banking Compliance Act, or H.R. 689, was originally presented in January 2019 by Rep. Ed Perlmutter (D-CO). The expense would require financial institutions to deal with cannabis-related services as a legal organization entity. What did the costs do? The expense developed the structure for how financial institutions can work with cannabis-related companies. It developed a legal structure for marijuana banking, and it would also make certain banks do not lose out on any potential monetary benefits from the cannabis market.

How to End Up Being a Cannabis Financial Institution?
Once the Marijuana Banking Compliance Act is signed into law, banks will have 3 options for dealing with cannabis-related businesses: i) provide financial services for cannabis-related companies; ii) provide non-financial services for cannabis-related services; or iii) decrease to supply any services to cannabis-related businesses. To prevent breaching the law, banks could pick to "wait-and-see" how things establish with the brand-new legislation. How long would this "wait-and-see" period be? There are presently no standards for how long banks could take previously making the decision on whether to work with cannabis-related businesses. This could leave banks in a hard position, because they might find themselves with a large number of cannabis-related companies applying for banking services. What takes place then? To avoid violating the law, banks might pick to "wait-and-see" how things establish with the brand-new legislation. How long would this "wait-and-see" duration be? There are currently no standards for for how long banks could take before making the decision on whether to deal with cannabis-related businesses. This might leave banks in a hard position, due to the fact that they might find themselves with a large number of cannabis-related companies looking for banking services. What occurs then? Banks might face considerable fines, and even deal with prospective criminal charges, should they decide to service cannabis-related organizations after the law remains in place.

Issues with Banking the Marijuana Market
The DEA has actually mentioned that cannabis is a Schedule I drug, which suggests it is considered as having a high potential for abuse and the capacity for no or low therapeutic value. This has actually led some banks to decline service to cannabis-related services. The American Bankers Association also provided an alerting to its members, mentioning that they must" Workout severe care when performing banking activities with entities involved in the marijuana market." The ABA went on to state that banks need to "guarantee that cannabis-related activities are not conducted through or performed by a savings account."

How to Bank the Marijuana Market

For banks seeking to enter the cannabis banking business, the process is fairly simple. The primary step is for the bank to identify a cannabis-related company as a legal entity. The entity should have legitimate licenses from the state that it's operating in. When the entity is determined as a legal organization, the bank will work with the entity to open a checking account or a cash transfer service. When opening an account for a cannabis-related company, ensure to note the following: Recognize the entity as a cannabis-related business.

Note the entity is running lawfully in the state that it's doing business in.

Bear in mind that banks can't open a represent an unlawful company.

Note the business is following all relevant anti-money laundering and counter-terrorism financing requirements.

Bottom line
The future of marijuana banking is an interesting one, and it's clear that banks are going to require to get on board with the altering legal landscape. With the Cannabis Banking Compliance Act just recently introduced, it's now much easier than ever for banks to work with the cannabis market. But with the legal landscape continuously changing, it is very important for banks to remain updated on their marijuana banking compliance so they do not miss out on any potential monetary take advantage of the marijuana market.

The current banking landscape for marijuana is hard for both businesses and banks. It's important that both the cannabis market and banks collaborate to create a more steady and reliable banking system for marijuana organizations.

Sources: https://jsheld.com/insights/articles/current-trends-in-banking-for-cannabis-related-businesses-crbs

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