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BUSINESS PARTNERfeature article

The Blunt Truths

of Banking MRBs

Carol Ann Warren , JD, MBA

Assistant Vice President Associate General Counsel
Compliance Alliance

For the typical office worker, marijuana is not typically number of states legalizing marijuana, the Department
the most “HR approved” subject of discussion. But in of Justice has chosen not to prosecute marijuana-related
banking, marijuana and marijuana-related businesses crimes. As mentioned, many states have chosen to legalize
(“MRBs”) are hot topics. There are conversations, marijuana, thus creating the tension between some states’
debates, and questions related to the definition laws and federal law. While there have been efforts to
of marijuana, what exactly an MRB is, and, most reconcile the discrepancies, there is no reprieve in place as
importantly, whether banks can serve these types of of publication date of this article.
businesses and what types of policies will need to be
drafted to serve them. Contrary to the legality of marijuana, hemp products
are legal in all 50 states. Hemp is defined as “the
First, there is a question of whether banking MRBs is plant Cannabis sativa L. and any part of that plant,
even legal. Under federal law, the sale of marijuana is including the seeds thereof and all derivatives,
illegal. Marijuana or cannabis is defined as “all parts of extracts, cannabinoids, isomers, acids, salts, and salts
the plant Cannabis sativa L., whether growing or not; the of isomers, whether growing or not, with a delta-9
seeds thereof; the resin extracted from any part of such tetrahydrocannabinol concentration of not more than
plant; and every compound, manufacture, salt, derivative, 0.3% on a dry weight basis.”
mixture, or preparation of such plant, its seeds or resin.” With the confusion surrounding the legality of marijuana,
Marijuana is classified as a Schedule I drug under the banks are stuck between a rock and a hard place. Most
Controlled Substances Act, enforced by the Department states have legal MRBs that need banking services, but
of Justice (“DOJ”). The main concern and issue related to marijuana is still illegal at the federal level. The Cole
marijuana is the delta9-tetrahydrocannabinol (“THC”) Memo was introduced in 2014 with the intent to bridge
content. This ingredient is believed to give marijuana its the gap between federal and state law. It established
psychoactive effects. THC content is the hinge of legality guidance to keep marijuana-related facilities off federal
on the federal level. If THC content is .03% or higher, land, protect children from the sale of marijuana-related
then the substance is illegal at the federal level. However, products, and curb drug-related crimes. The Memo
due to the shift in public perception and the increasing

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