Get Prepared for the Cannabis Industry
To Bank, or Not to Bank Cannabis-Related Businesses
As of December 2019, the laws around recreational cannabis have changed in Michigan. Whether you plan to do business with the cannabis industry or not, you need a plan and the people power to execute it. Are you prepared?Talk to a specialist
Chose to Bank CRBs
- Customer due diligence (CDD) is key; Know your customer, including beneficial owners, and the full scope of their business(es).
- Ongoing monitoring and enhanced due diligence (EDD) is critical to ensuring all transactions are legitimate. Balance anticipated activity (particularly cash) with actual activity.
- Go for that fee income! Use account analysis as well as a monthly fee for the heightened risk and monitoring costs you will incur.
If you want to Avoid Banking CRBs
- Update your BSA/AML policy to include that your financial institution will not “knowingly” provide services to these customers to exit the relationship if discovered without breaking policy.
- Perform CDD. Ask if the customer is involved in any type of CRB. Put the responsibility on the customer to be honest.
- Use ongoing suspicious activity monitoring for cash volumes and other activity that doesn’t fit the customer’s line of business.
Cannabis Law in Michigan
USDA Approved Hemp Plan
Michigan has not yet submitted their state-specific plan for hemp growers to the USDA. Stay updated if a plan is submitted.STAY UPDATED ON ITS STATUS HERE
Check Local Laws
Even though recreational marijuana was legalized at the state level in December 2019, almost 80% of municipalities have opted out of allowing recreational use.Map of municipality laws
The state of Michigan’s Marijuana Regulatory Agency awards licenses to medical and recreational marijuana facilities.See the full list
Solutions and services to help you clear the smoke.
CRB Watchlist Scanning
In the first two months of legal recreational use, the state approved 43 recreational pot dispensaries, 18 growers, seven processors, and three event organizers. Are you banking one of them? Do you really know your customers/members as well as you think? Our CRB watchlist scanning, part of BAM+ Scan, allows you to use the power of NominoData to scan against state-licensed cannabis dispensaries, ensuring you truly know who you're banking.
With BAM+ CRB Scenarios, your transactions will be scanned weekly against four different scenarios intended to alert you to potentially suspicious activity resulting from unidentified CRBs/MRBs. It will work both as you onboard new relationships and monitor existing ones to avoid any unpleasant surprises down the road.
CRB Policy and Procedure Review
Whether your institution has decided to service, or not service, CRBs/MRBs, you need to update your policies and procedures to reflect that decision. How are you actively monitoring to ensure you don't unknowingly have a CRB hidden in your customer base? Our Advisory Services team can help make sure you stay in compliance.
SUSPICIOUS ACTIVITY MONITORING
No matter whether you decide to bank or avoid CRBs/MRBs, there is an increased, and often unexpected, amount of diligence and monitoring your BSA department is tasked with. Our Advisory Services team can help act as an extension of your BSA department for a long-term assignment or short-term help so you don't skip a beat.
Marijuana Related Businesses (MRBs) or Cannabis Related Businesses (CRBs) continue to pose heightened risks for financial institutions.
With the new cannabis law changes in Michigan, the question arises “are you ready to provide services to these businesses or exit these relationships?”
Whether or not your institution wants to successfully take on these risks or not, learn how to safely bank or take measures to avoid MRBs/CRBs.
Hear from a panel of current BSA executives that are either successfully providing services to these businesses or that are successfully avoiding this risk.