FinCEN’s most recent information regarding financial institutions providing services to cannabis-related businesses (“CRBs”) indicates a slight decline in the overall number of depository institutions providing such services during the first quarter of 2020. FinCEN speculated that the decline might be short-term and attributable to late Suspicious Activity Report filings. Regardless, the number of financial institutions actively banking cannabis has stayed steady for over a year. Although there may be many reasons preventing new entrants from coming into the space, one of the biggest hesitations relates to the Senate’s failure to pass the SAFE Banking Act, or some version of it. As the November elections near, it may seem even more unlikely that the SAFE Banking Act will finally become law; however, with the GOP controlled Senate preparing its own version of a second coronavirus stimulus package, there is still a chance that the Senate could include provisions of the SAFE Banking Act similar to those included in the HEROES Act passed by the House in May. Strategically and practically, it would make sense.
Since it passed in September 2019, the SAFE Banking Act has been stalled in the Senate’s banking committee led by Sen. Mike Crapo of Idaho. In … Keep reading
Frank A. Segall and Scott Moskol, Co-Chairs of the Cannabis Business & Law Advisory group, facilitated a discussion with Katrina Skinner on the cannabis industry’s most pressing banking issues for businesses and financial institutions.
Click here to watch the full webinar.… Keep reading
With recent COVID 19-related mandates, such as the shelter-in-place orders or social distancing requirements, many businesses and cannabis companies have reached out to the governor’s office or other state and local officials with attempts to influence relief legislation or to request an industry-wide exception to a regulation. Did you know these types of activities may be considered lobbying and in some jurisdictions require registration as a lobbyist?
When analyzing whether you or your business may be lobbying, it’s helpful to keep in mind a broad and basic definition of lobbying. Lobbying in a nutshell could be considered any act that attempts to influence a government official or employee regarding a government action or issue. The challenge of lobby laws is that there may be up to three layers – federal, state, and local. Federal lobby laws are covered by The Lobbying Disclosure Act of 1995, however, there is not a universal definition of lobbying on the state and local level, and each state, city, municipality, or another local area may adopt its own definition and registration requirements. Therefore, as a matter of regulatory compliance, cannabis companies should have an awareness of the lobby laws where they operate and do … Keep reading
On June 29, 2020 (“June Guidance”), the Financial Crimes Enforcement Network (FinCEN) issued additional guidance for financial institutions providing, or considering providing, financial services for hemp-related businesses. The June Guidance supplements the interagency statement issued on December 3, 2019, and provides clarity on what steps a financial institution can take to conduct due diligence on hemp-related businesses in order to comply with BSA requirements. The new guidance is detailed enough that FinCEN should easily accomplish its goal of making transparent financial services readily available to hemp-related businesses.
Specifically, FinCEN directed financial institutions to conduct customer due diligence (“CDD”) of hemp-related businesses in accordance with their current risk-based policies and procedures, including those that apply to ongoing account monitoring. Rather than mandate specific due diligence requirements, FinCEN said that the information sought by a financial institution should depend on the risk attributed to each type of customer after conducting an appropriate risk assessment. Nevertheless, FinCEN did provide several examples of types of information that may be gathered to help ensure that a financial institution knows its hemp-related business customers and that it can identify and report suspicious activity, including those red-flag activities outlined in the June Guidance.
Notably, the June … Keep reading