In recent years, Massachusetts and Rhode Island have embraced the legalization of marijuana, giving rise to many new cannabis-related businesses (CRBs) to meet this growing market demand. For many local business owners, operating in a legal cannabis market is an exciting opportunity.
The challenge that CRBs face is that while some states have legalized marijuana, the federal government has not. Because the federal illegality issues, CRB businesses have a potential legal roadblock when it comes to depositing and managing their money. While many national banks don’t serve CRBs, community banks like BayCoast have stepped in to support these businesses.
Cannabis Banking Basics
The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, has issued guidance to clarify Bank Secrecy Act (“BSA”) expectations for financial institutions seeking to provide services to cannabis-related businesses.
If a CRB works with a bank that adheres to a high standard of compliance, it would be functioning within FinCEN’s guidelines. This would entail that the business is licensed and registered with all pertinent state agencies, notably the Cannabis Control Commission. Additionally, the bank is required to monitor CRBs for any unusual activity and conduct due diligence to ensure the accuracy of the business information.
Financial Services for Cannabis-Related Businesses
When selecting a bank for your business, trust is essential. The bank should proactively convey the specific information and documents required from you, maintain ongoing communication with regulators, and keep you updated regarding any changes. By maintaining thorough records and fostering a culture of transparency with your banking personnel, you can rely on them to facilitate smooth operations.
By partnering with a trusted bank, you can take advantage of banking services just like any other business. You’ll gain access to everyday products and services like business checking (with online banking options), ACH transactions, and wire transfers. You and your employees can even use the same bank for your personal financial needs. At BayCoast Bank, we also recommend trusted technology providers that design digital products specifically for the cannabis industry.
Start Your CRB Journey Today
If you’re currently operating or aspiring to run a cannabis-related business in Massachusetts or Rhode Island, BayCoast Bank is equipped to accommodate all your banking requirements. Leveraging our extensive knowledge of the intricate legal compliance landscape, our experts can facilitate access to all necessary banking services for your business.