WASHINGTON, Feb. 14 (UPI) -- The U.S. Treasury and Justice departments issued new rules Friday outlining procedures for banks doing do business with legal marijuana shops.
Under the new regulations, banks wanting to conduct business with legal marijuana dealers must verify that sellers are properly licensed and must collect information about the products they sell and their customer base, NBC News reported.
Banks must be watchful for any signs dealers are engaged in improper transactions, the rules said. Current rules require banks to notify federal regulators of suspicious activity by their customers -- the new rules still require the notices, but banks believing a marijuana dealer is legitimate will file a "marijuana limited" report, NBC News said.
If a bank doesn't think a dealer is acting properly under the guidelines, the financial institution should file a "marijuana priority" report, which federal officials said could be based on factors such as more revenue than local competitors or an inability to show that revenue is gained exclusively from legal sales, NBC News said.
The rules are meant to "move from the shadows the historically covert financial operations of marijuana businesses," said Jennifer Shasky Calvery, director of the Treasury Department's Financial Crimes Enforcement Network.
Twenty states and the District of Columbia have passed laws allowing the sale of medical and recreational marijuana, but its production, sale, and possession remain illegal under federal law.
"Cash businesses such as marijuana distribution can be a magnet for criminal violence. Today's guidance seeks to mitigate the public safety concerns created by high volume cash based businesses without access to the banking and financial systems," U.S. Attorneys Jenny Durkan and Michael Ormsby in Seattle said in a statement. "The guidance also seeks to prevent criminal organizations from laundering their criminal proceeds beyond the reach of law enforcement. The guidance reaffirms the expectation that states that have enacted laws authorizing marijuana-related conduct will implement clear, strong and effective regulatory and enforcement systems."
