On January 4, 2018, Attorney General Jeff Sessions issued a Memorandum which reverses the Department of Justice’s (DOJ’s) stance on enforcement of the Controlled Substances Act as it relates to medical and recreational marijuana that is legal at the state level. How this will impact federal prosecution of the marijuana industry is uncertain, but the memo refers to existing enforcement principals in Section 9‐27.000 of the U.S. Attorney’s Manual. The DOJ’s decision to prosecute violations of federal law reverts to the following:
- Priorities set by the Attorney General
- Seriousness of the crime
- Deterrent on future criminal activity
- Cumulative impact on crimes within a particular community
The Department of Justice(DOJ) is still prohibited from prosecuting medical marijuana by the Rohrabacher–Farr amendment, a law that has been a part of U.S. budgets since December 2015. However, the current federal budget expires on January 19, 2018 and there is no guarantee that Congress will renew the prohibitions. The amendment does not limit the Department of Justice’s ability to prosecute recreational marijuana.
Financial institutions that elected to provide services to marijuana related business (MRB) operating under state law still have a responsibility under the Bank Secrecy Act to file Suspicious Activity Reports (SARs) based on guidance from FinCEN in February 2014. However, this guidance directs SARs to be filed based on the MRB operating in accordance with the priorities set forth in the now rescinded Cole Memo. FinCEN has not issued a statement indicating whether it will provide updated guidance based on the change in the DOJ’s priorities. Also, it’s unclear how this change could impact “indirect” MRBs, those businesses and individuals that receive payments from MRBs such as commercial properties, employees, service providers, etc.
Institutions should evaluate the legal, regulatory, reputation and financial risks that are evolving based on this change in the DOJ’s position when evaluating current MRBs or if it is considering providing services to the industry.
TCA boasts some of the top Bank Secrecy Act subject matter experts and nationally recognized speakers. See Executive Vice President and BankersOnline Guru Brian Crow at the BOL BSA Top Gun Conference on February 27th and 28th and call us at 800‐934‐REGS to schedule your 2018 BSA Audit today!
