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The movement to legalize certain marijuana-related activities across nearly half the states in the nation has rapidly advanced a current stalemate between the marijuana industry and the financial services industry. Federal anti-money laundering (AML) laws prohibit financial institutions from facilitating activities that may be linked to the illicit growth, sale, and possession of marijuana, and as a result many financial institutions, unwilling to invite regulatory scrutiny, are refusing services to the newly legitimized marijuana industry (herein referred to as “Cannabusiness”) even in states where the business is legal.
What’s more, uncertainty stemming from the dichotomy between state and federal laws has led numerous financial institutions, particularly banks and credit card companies, across the country to shut down Cannabusiness owners’ existing accounts, often including their personal accounts. This expulsion has forced some Cannabusinesses to operate exclusively in cash and others to seek alternative methods to access the financial services industry, including disguising the source of their funds in various ways.