On July 23, 2019, John Lord, owner and CEO of LivWell Enlightened Health, testified in front of the Senate Banking Committee.  LivWell is a Colorado-based cultivator, manufacturer, and retailer of marijuana products; it employs 600 people across 15 stores and brings in $100 million in annual revenue.  Lord faced the Senate to address modern challenges facing legal marijuana and banking. During the hearing, he disclosed a fact common to many marijuana-related businesses: that despite serving an average of 4,500 people daily for $20,000 in earnings, LivWell operates as an all-cash business. 
Authored By: Scott Himelein
Lord has worked in the legal marijuana business since 2009, when he set up a cultivation space and dispensary for medical marijuana purposes in Colorado. He testified that over the past decade, banks and credit unions have either been reluctant to do business with him, or flat out refused.  He said some regulators had directly discouraged or prevented some of those financial institutions from doing business with him.  In consequence, Lord has struggled to open and maintain a bank account. At one point, he rented out a former bank as a vault to store cash. Another time, he had to walk to an IRS office with more than $3 million in cash to pay federal taxes.
He testified his relationship with banks has improved in present day, but it still involves too much cash. The company pays $3,000 per month just to have a bank account. Lord testified while his company is able to absorb costs linked to cash management and exorbitant bank fees, many smaller stores are not.  He added that credit card companies refuse to process marijuana transactions, forcing customers to bring more cash to stores.
Lord was one of many marijuana business leaders who testified at the hearing, along with U.S. senators and banking leaders, about the problems presented by the current banking landscape in conjunction with legal marijuana. A recurring theme of the hearing was that as more and more states have legalized recreational and medical marijuana, the banking industry has not properly accommodated the economic boom; millions of dollars remain unbanked. Many businesses and banking institutions operate with a fear of federal prosecution, a need for overly-burdensome regulatory compliance, and a vulnerability to crime with a heavy cash stock.
Locally, New Jersey, Pennsylvania, and Delaware are inching closer to reforming marijuana laws, and may look to other states, like Colorado and Illinois, along with the prospect of federal legislation, to alleviate potential concerns. Colorado, Illinois, and the federal government present different solutions to the problem, and each has strengths and weaknesses. Ultimately this paper will show — along with a history of the legal marijuana industry, banking industry and past case law — that a clear solution is not possible until the federal government enacts nation-wide legislation; otherwise cash will remain unbanked, marijuana business will remain at risk, and financial institutions will continue to conduct burdensome, bordering on unrealistic, compliance measures in order to participate.
- Marijuana in 2020: Popularity and money trend up without banking solutions
The United States is demonstrating an increasing acceptance towards marijuana legalization. Colorado and Washington were the first states to legalize recreational marijuana in 2012.  Since then, nine states and Washington, D.C. have followed suit.  33 states in addition to Washington, D.C. allow marijuana for medical use. 25 states have decriminalized marijuana.  Medical marijuana sales were expected to reach $5.9 billion in 2019 while recreational marijuana sales were expected to amount to $7 billion.  These numbers are up 28% and 21% respectively from 2018. In 2019, the number of registered U.S. medical marijuana patients was projected to grow by 26%, from 1.9 million patients in 2018 to 2.4 million patients.  Tax revenue generated by marijuana sales ranged from $5.2 million in Maryland to $319 million in Washington last year. 
Eleven more states could have recreational marijuana legalization on their November 2020 ballots: Arizona, Arkansas, New Jersey, South Dakota, Pennsylvania, Montana, New York, North Dakota, Virginia, New Hampshire, Florida, and New Mexico.  Two more states may legalize the use of medical marijuana this year: Mississippi and Idaho. 
Surveys of the general public over the past 20 years also reflect an increasing acceptance towards legalization. In 2001, a Gallup poll showed 34% of U.S. adults supported marijuana legalization.  In 2019, a Gallup poll showed 66% of U.S. adults supported it.  That same year, a Pew Research Center poll found 67% of Americans backed legalization. 
With public popularity and state legislation trending upwards, the legal marijuana business will naturally grow. One marijuana data analysis company projected the industry to grow to $25 billion by 2025.  With this prospective surge, marijuana businesses are faced with a dilemma of where to store their cash. Although the number of banks and credit unions participating has increased moderately in the past year, banks still regularly refuse to do business with marijuana businesses for fear of federal prosecution. In the last quarter of 2020, the Financial Crimes Enforcement Network (“FinCEN”) reported that 563 banks and 160 credit unions were serving marijuana companies as of September 30, compared to 553 banks and 162 credit unions at the end of the previous quarter.  These numbers are based on the number of suspicious activity reports submitted. Banks and credit unions are required by the U.S. Treasury to submit suspicious activity reports if and when they elect to provide financial services to marijuana businesses.
There is the aforementioned story of Lord walking to an IRS office with $3 million in cash to pay federal taxes. Business clients told a Colorado attorney stories of going from ATM to ATM at night and depositing as much cash as permitted until the sun came up.  Colorado credit union officials described how one of its client had been closed out of eighteen bank accounts since 2009; each time the client had to transition back to a cash system. The lack of an established banking industry leaves marijuana-related businesses, like LivWell and countless others, in a bind. Federal laws render it impossible for marijuana-related businesses to open checking or savings accounts in federally insured financial institutions, wire funds or access lines of credit, or receive credit cards from financial institutions.  Without banks, the industry has turned predominantly cash-only. The problems of that are manifold.
This doesn’t just create immense inefficiencies for the businesses but also leaves them vulnerable to criminal acts. In 2015, a Wharton School of Business study found that one in every two dispensaries was robbed or burglarized, with the average criminal walking away with anywhere from $20,000 to $50,000.  The Denver Police Department reported 122 burglaries and 5 robberies of dispensaries in 2019, which was a three year high. Denver police are currently investigating possible connections in robberies of seven dispensaries since November 2019.  District Attorney of Colorado Mitch Morrissey said he has seen a direct increase in crime cases related to the marijuana industry. He said, “You hit a 7-Eleven, you’ll get 20 bucks. You hit a dispensary, you’ll get $300,000 on a good day.” 
- U.S. marijuana and banking law
- U.S. marijuana laws
Under federal law, marijuana is still illegal. In 1970, Congress passed the Controlled Substances Act under the direction of President Nixon. This was in the midst of the politically-charged War on Drugs campaign.  The law created five schedules of drug use and listed marijuana as a Schedule 1 substance. By the guidelines of the law, this means the drug has high potential for abuse and no accepted medical purpose. Drug schedules are also a factor in determining criminal punishments. Other examples of Schedule 1 drugs include heroin, ecstasy, and LSD.  That classification inhibits research opportunities, as it creates more barriers, oversight, and a prohibition from research in some cases.  Despite numerous petitions and legislative proposals, the drug has remained as a Schedule 1 substance.
The current state of federal ambiguity on marijuana legalization began in the 1990s and 2000s, after a number of states legalized medical marijuana. California was the first to do so in 1996. Proposition 215 permitted citizens to use marijuana if they received an “oral or written recommendation from a doctor.”  By the time 13 states had legalized medical marijuana in 2009, the Department of Justice addressed the issue. In two separate memos in 2009 and 2013, the department issued guidance on how to regulate the state legalization of a federally-illegal drug. 
First, in 2009, Deputy Attorney General David Ogden released a memo attempting to clarify enforcement policies to federal prosecutors in states that legalized medical marijuana. While clarifying that marijuana was still illegal on a federal level, he directed that federal resources should be used towards the objectives of illegal drug trafficking and manufacturing.  Conversely, he stated that resources should not be used on citizens “whose actions are in clear and unambiguous compliance with existing state laws” in relation to medical marijuana.  Ogden said this would be “unlikely to be an efficient use.” 
In 2012, Colorado and Washington became the first U.S. states to legalize the recreational use of marijuana. A year later, the Department of Justice issued federal guidance. Deputy Attorney General James Cole issued a memo to all U.S. Attorneys, clarifying the DOJ would no longer enforce federal marijuana prohibition in states where the practice had been legalized recreationally.  Its language mirrored the preceding Ogden Memo, but focused on recreational marijuana rather than just medical marijuana. It urged for a more hands-off approach toward “jurisdictions that have enacted laws legalizing marijuana in some form and that have also implemented strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale and possession of marijuana.”  The memo declares that federal resources would be better spent elsewhere, than the reinforcement of these laws.
Like the Ogden Memo, the Cole Memo still emphasized that marijuana is federally illegal; unlike the Ogden Memo, it specified eight priorities for attorneys and law enforcement. It suggested resource allocation to the prevention of the following: 1) marijuana distribution to minors 2) revenue from sale of marijuana going to criminal enterprises 3) the diversion of marijuana from states where it is legal to other states 4) state-authorized marijuana activity from being used as a cover for trafficking other illegal drugs or illegal activity 5) violence and use of firearms in cultivation and distribution of marijuana 6) drugged driving and other public health consequences 7) growing of marijuana on public lands and 8) marijuana possession or use on federal property. 
On January 4, 2018, Attorney General Jeff Sessions rescinded the Cole Memo in a one page letter to U.S. Attorneys.  He said, “Given the Department’s well-established general principles, previous nationwide guidance specific to marijuana enforcement is unnecessary and is rescinded, effective immediately.”  He referred to the Controlled Substances Act’s classification of marijuana as a dangerous drug, and that marijuana activity is a serious crime. He left specific prosecution decisions up to the 93 local U.S. Attorney offices. He clarified that the memo is intended to guide in investigation and prosecution discretion in regards to applicable laws, and it is not intended to be relied upon “to create any rights, substantive or procedural.”
Since Sessions’ resignation in November of 2018, the Department of Justice official stance on legal marijuana has been less clear. During an April 2019 Senate Appropriations hearing, Sessions’ replacement William Barr said the current situation between federal and state law was “intolerable.”  In that same hearing, Barr said he accepted the Cole Memo for now, but also would leave it up to U.S. Attorneys in each state to determine the best approach for their state. As for his own personal belief, he said he preferred a federal law against marijuana. He said if there’s not sufficient consensus to obtain that, then he hopes for “a federal approach in which states can make their own decisions within the framework of the federal law so we’re not ignoring the enforcement of federal law.”  At the time, the STATES Act bill was in committee — it’s a bill that would amend the Controlled Substances Act to exempt individuals and corporations doing marijuana-related businesses in compliant states — and Barr said he would prefer that to the current situation.
Ultimately, the string of memos have led to more state by state discretion. After Massachusetts legalized marijuana in 2016, U.S. Attorney Andrew Lelling announced he would focus on three major priorities: 1) overproduction of marijuana 2) targeted sales to minors and 3) organized crime and interstate transportation of drug proceeds.  The U.S. Attorney’s Office for the District of Colorado issued a statement in 2018 in response to Jeff Sessions, clarifying its stance to marijuana prosecutions would remain unchanged.  The U.S. Attorney for the District of Oregon held a Marijuana Summit in 2018 and crafted the Williams Memo, which directed for a similar approach to the Cole Memo, but with more state specific details. 
Even at the interstate level, confusion can arise. The U.S. Attorney’s Office in the Northern District in Florida vowed last year that it would continue to prosecute marijuana-related cases. It says it would use the same considerations it always has, in analyzing the seriousness of the crime, deterrent effect of criminal prosecution, and cumulative impact of the crimes on the community.  This came a month after State Attorney Jack Campbell had announced he was putting a pause on marijuana-related prosecution. 
For the most part, federal prosecutors have kept a distance from marijuana law enforcement; the amount of marijuana-related federal prosecution is decreasing. Supreme Court Chief Justice John Roberts reported that in 2019, federal prosecution on marijuana-related crimes dropped by 28% for total filings. The year before that, federal filings associated to marijuana had decreased 19%.  There are still some examples of federal intervention however. This year, prosecutors in the Eastern District of California subpoenaed documents for 30 California marijuana-related companies, presumably to examine their compliance with state law.   Meanwhile, federal prosecutors in Michigan prosecuted a medical marijuana dispensary owner last year because he operated the business despite being a convicted felon; he was sentenced to 16 years in prison. 
- An overview of the U.S. Banking regulatory system
In the United States, financial institutions are subject to a dual banking system: they can be chartered by both states and the federal government.   Regulating agencies include the Board of Governors of the Federal Reserve System, the Officer of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau. The Board of Governors of the Federal Reserve System supervises and regulates the Federal Reserve Banks. The Office of Comptroller of the Currency charters, licenses, regulates, and supervises national banks and federal savings associations. The Federal Deposit Insurance Corporation insures depositors and acts as the primary federal supervisor for state-chartered banks. The Consumer Financial Protection Bureau oversees federal consumer financial protection laws. These federal agencies are expected to coordinate their regulatory efforts with one another. 
State banks are corporations chartered under the laws of the states and are subject to the banking laws and regulations of the respective state.  All state banks are also required to have a federal regulator. State banks that are federal reserve members are regulated by the Board of Governors of the Federal Reserve System. Non-members are regulated by the Federal Deposit Insurance Corporation. 
These agencies’ enforcement measures include cease and desist orders, civil money penalties, and prompt corrective actions.  Cease and desist orders are a form of injunction used to stop a financial institution engaging in an unsafe or unsound banking practice or a violation of law. Civil money penalties are a form of a fine. Prompt corrective actions are orders that require the institution to take corrective measures based on statutory remedies. On top of this, the institutions may be required to pay restitution to aggrieved parties. The Deloitte Center for Financial Services found the three largest reasons for severe action against large financial institutions from 2008 to 2015 were 1) deficiencies in residential mortgage servicing and foreclosure practices 2) violations of the Bank Secrecy Act and other federal law, or deficiencies in related compliance programs and 3) violations of Section 5 of the FTC Act, which refers to deceptive practices affecting commerce. As for mid-sized institutions, two of the three largest reasons were also violations of the Bank Secrecy Act and Section 5 of the FTC Act, but in addition to deficiencies in related compliance programs and weakness in financial soundness of the banks.
- Relevant law and guidance for marijuana-related banking
Congress passed the Bank Secrecy Act (“BSA”) in 1970 to prevent criminals from using financial institutions to hide financial gains.  The law requires businesses to keep records and file reports that have a high degree of usefulness in criminal, tax, and regulatory matters. Examples of this include keeping records of cash purchases of negotiable instruments, filing reports of cash transactions exceeding $10,000, and reporting suspicious activities that might signal criminal activity such as money laundering or tax evasion. 
The Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, showcases how these records are used in criminal prosecution.  For example, in 2003, an illegal marijuana dealing business funneled cash into multiple business accounts; it was uncovered when two separate financial institutions filed suspicious activity reports for large cash deposits. The defendants had attempted to avoid reporting requirements by depositing under $10,000, but suspicion arose from the depositing of cash on consecutive days, making several deposits on the same day, and spreading the deposits among bank accounts at different institutions.  In 2005, an illegal marijuana farm was uncovered when a bank filed a suspicious activity report; the farm owner had falsified corporate documents to make the farm a real property development company and deposited $1 million over several years.  In 2008, a bank’s filing of suspicious activity reports for transactions of $500,000 in a 5-day period led to the uncovering of a large-scale international marijuana smuggling and money laundering operation.  The operation had tried to use a business bank account to “wash its dirty currency.”
In 2014, FinCEN released a statement in coordination with the U.S. Department of Justice, offering guidance to financial institutions working with marijuana-related businesses on how to stay compliant with the Bank Secrecy Act.  FinCEN explicitly stated the institutions “can provide services to marijuana-related businesses in a manner consistent with their obligations to know their customers and to report possible criminal activity.”  The guidance was also intended to address Cole Memo priorities. It specifically described protocol for customer due diligence, filing suspicious activity reports, and currency transaction reports.
FinCEN offered seven considerations for customer due diligence: 1) verifying with appropriate state authorities about the business license and registration 2) reviewing the license application submitted by the business for the state license to operate marijuana-related business 3) requesting information about the business and related parties from state licensing and enforcement authorities 4) understanding the normal and expected activity for the business including the types of products being sold and types of customers being served 5) monitoring public information for adverse stories about the business 6) monitoring for suspicious activity and 7) refreshing the preceding information on a periodic basis. 
FinCEN also mandated financial institutions working with marijuana-related businesses to always fill out suspicious activity reports, by Bank Secrecy Act guidelines, because even if state law is being followed, federal law is still being broken.  The new guidance did limit the type of filing needed for a marijuana-related business — called a “Marijuana Limited” suspicious activity report filing — dependent on whether its meeting Cole Memo priorities and state law. This includes the disclosure of the business identification, business address, acknowledgement that it’s a marijuana-related business, and assurance that no other suspicious activity had been identified. If the business, based on customer due diligence, implicates one of the Cole Memo priorities, then a “Marijuana Priority” suspicious activity report must be filed, which includes information about the enforcement priorities being implicated. Finally, if a financial institution believes it is necessary to terminate the relationship with the business based on its conduct, the institution must file a “Marijuana Termination” suspicious activity report. 
- Case Authority
Federal courts over the past 20 years have struck a balance in ruling on marijuana regulation; they’ve generally upheld states’ rights to legalize medical and recreational marijuana while respecting Congress’s classification of marijuana under the Controlled Substances Act. When compelled to take a side in 2005, the Supreme Court held for federal preemption power via the U.S. Constitution over a California state law for medical marijuana.  However, that case, and other substantive federal cases transpired before the Department of Justice issued regulatory guidance via the Ogden Memo for medical marijuana in 2009 and the Cole Memo for recreational marijuana in 2012.
The first time the Supreme Court addressed the subject was in 2001, just five years after California became the inaugural state to legalize medical marijuana.  The Court heard arguments on whether there was a common-law “medical necessity” for marijuana that superseded the Controlled Substances Act classification.  The Court held that there was no medical necessity exception under the Controlled Substances Act and that Congress stated in the legislation that there was “no currently accepted medical use” for marijuana.  The Court added that it was explicitly not addressing whether federal law could preempt the California state law; this case was distinguishable because the defendants were part of a city-operated medical marijuana distribution center rather than cultivation from a doctor or patient as the state law permitted. 
In 2002, the Ninth Circuit ruled on an important ancillary issue to marijuana regulation: the medical license for doctors to prescribe marijuana.  A year after the 1996 passage of medical marijuana, the Office of National Drug Control Policy issued a statement, threatening DEA revocation of a practitioner’s registration and a withholding of Medicare and Medicaid reimbursements to any physician who recommended or prescribed marijuana.  The Department of Health and Human Services and the Department of Justice issued a joint letter clarifying that “physicians may not intentionally provide their patients with oral or written statements in order to enable them to obtain controlled substances in violation of federal law.”  The court upheld a district court ruling in favor of the plaintiff doctors, enjoining the federal government from either revoking a physician’s license to prescribe controlled substances or conducting an investigation of a recommending physician that might lead to such revocation.  The ruling paved the way for medical marijuana legalization to continue without a chilling effect on physicians.
In 2005, the Supreme Court made its most important ruling on legalized marijuana.  In California, federal agents seized and destroyed Angel Raich’s six home-grown marijuana plants, despite the plants being compliant under state law.  Raich used them for chronic pain; a doctor testified at trial that the marijuana was keeping her alive.  Raich brought an action against the U.S. Attorney General and the head of the DEA seeking injunctive and declaratory relief prohibiting the enforcement of the Controlled Substances Act against him. The case was ultimately brought before the Supreme Court, which held that the regulation of marijuana under the Controlled Substances Act was within Congress’ Commerce Clause power under the U.S. Constitution. The Court held that the Controlled Substances Act applied nation-wide and upheld marijuana’s classification as a Class 1 drug under the Act. 
Justice Stevens wrote the majority opinion, holding that home cultivation of marijuana can still have an impact on the supply and demand of an interstate market, which creates a rational basis for the Commerce Clause to apply under the U.S. Constitution.  He wrote that there were striking similarities between this case and Wickard v. Filburn, a 1942 commerce clause case, in which home-grown wheat was found to have a similar impact on supply and demand in a national market. Similarly, leaving home-consumed marijuana outside federal control would affect price and market conditions. Stevens wrote that Congress had a legitimate concern that this home-cultivated marijuana could be diverted into illicit channels. 
Justice Scalia wrote a concurring opinion, focusing on the issue of federal power vs states rights. He held that the Commerce Clause and Necessary and Proper Clause permitted a federal preemption because Congress’s objective of “prohibiting marijuana from the interstate market could be undercut if those activities were excepted from its general scheme of regulation.”  He added that Congress should not have faith that state law would be effective in maintaining a division between a lawful medical marijuana market and the general marijuana market.
Justice Stevens also cited the Supremacy Clause in the allowance for federal preemption.  This decision acted as the largest example of federal authority since marijuana legalization. Theoretically, it could be used as authority for any federal preemption of state law in reference to marijuana legalization. It could be argued the Controlled Substances Act preempts any state law.
Marijuana legalization advocates could provide two counter-arguments. First, Gonzales curtailed its scope to only the home-cultivation of marijuana; it wrote of the pitfalls of regulating a home-grown marijuana plant, which creates Congressional concern, and thus a rational basis for federal preemption.  Marijuana advocates could argue this case is not analogous for marijuana-related businesses, and specifically, dispensaries with more robust regulatory measures than a home-cultivated plant. Second, this case may not hold the same level of authority after the Department of Justice issuance of the Ogden Memo and Cole Memo. The Court was acting without official agency guidance at the time in 2005; it’s possible these frameworks could be a source of federal guidance permitting states’ marijuana legalization rights.
Marijuana legalization advocates could also point to a 9th Circuit Court of Appeals ruling in 2015, which held that the Department of Justice could not spend money to prosecute federal marijuana cases if the defendants were complying with state medical marijuana laws.  The court incorporated the Appropriations Clause and U.S.C.S §542 — an appropriations act to prohibit DOJ funds to prevent any implementation of medical marijuana practices — to determine the DOJ could not spend these funds, as it would be doing so without authorization by statute.  The majority opinion stated, “By officially permitting certain conduct, state law provides for non-prosecution of individuals who engage in such conduct. If the federal government prosecutes such individuals, it has prevented the state from giving practical effect to its law providing for non-prosecution of individuals who engage in the permitted conduct.if the defendants comply with state guidelines that permit the drug’s sale for medical purposes.” 
Since its ruling in 2005, the Supreme Court has been generally mum on the topic of marijuana legalization. It has not reviewed its Gonzales ruling and has not taken any position since the Ogden and Cole memos. A number of states had legalized medical marijuana at the time of Gonzales but none had legalized recreational marijuana yet. In 2019, the Supreme Court denied cert for a Colorado case about the legality of Section 280E of the US tax code, which prohibits certain deductions to marijuana-related businesses due to “trafficking in controlled substances.” 
III. Mechanisms for marijuana-related banking in 2020
As more states legalize the use of marijuana, state leaders have employed a variation of strategies to deal with issues caused by modern day marijuana banking. Illinois passed banking legislation in conjunction with its legalization bill, to set up a framework for compliance. In Colorado, one of the elder statesmen of the legalization community, a credit union has created a compliance model; it banks around half of the state market.  Meanwhile, U.S. congressmen have proposed a bill designed to address the issue; it’s awaiting a vote in the Senate. A further analysis of the three potential solutions follows.
- The state of Illinois passes legislation
In May of 2019, Illinois’s General Assembly legalized recreational marijuana, becoming the first state to legalize through a legislature rather than a ballot initiative.  Months later, the state legislature also became the first to pass a bill to offer safe passage to the banking industry to deal with legal marijuana.  In 2018, there was $136 million in legal marijuana sales in Illinois. As State Treasurer Michael Frerichs puts it: “That much cash in any industry is ripe for theft, fraud, and tax evasion.” 
The amendments made to the Illinois Banking Act hold that the state can not issue an order or penalize a financial institution for providing financial services to a marijuana-related legitimate business.  This includes savings accounts, loans, real estate, and equipment.  It bars the Illinois Department of Financial and Professional Regulation from penalizing or discouraging banks and credit unions that serve marijuana-related businesses. 
Additionally, the State Treasury has implemented various provisions to supplement the bill. It employs banking services to collect taxes and fees.  It contracts with three financial institutions to collect money on behalf of state agencies. The State Treasury has hosted banking summits to help generate ideas for the industry in April and December of 2019, and plans to hold more. The summits allow industry members to present ideas for best practices and provide local financial institutions with a road map to banking with marijuana-related business. 
The State Treasury also created the Community Invest Marijuana Banking Services Program, a community development program offering financial institutions access to state investment capital at a lower interest rate.  The purpose is to provide these institutions with more resources for expansion of basic banking services to marijuana-related businesses. It provides financial institutions with a 2 year deposit with variable monthly rates and provides marijuana-related businesses with reasonable banking fees. The State Treasury website states that this “promotes the transition of an all-cash marijuana market to a fully banked, regulated, and transparent market.” 
The proceeds of taxes and fees from the legal marijuana are then deposited
into the Cannabis Regulation Fund.  This fund allocates revenue to costs incurred for implementing, administration, and enforcement of the Cannabis Regulation and Tax Act to a number of government departments, including the Department of Public Health, Department of Revenue, Department of State Police, and Department of Financial and Professional Regulations. 
- A Colorado credit union steps up
In 2012, Colorado legalized recreational marijuana after a popular initiative ballot passed to amend the Constitution of the State of Colorado.  The vote passed with 55.32% of voters in favor.  The ballot allowed adults 21 years or older to grow up to six total marijuana plants, legally possess up to one ounce of marijuana in public and gift up to one ounce to other citizens.  The law became official when Governor John Hickenlooper ratified the ballot into the state Constitution on December 10, 2012.  The first recreational marijuana stores opened up in January of 2014. 
From its genesis in 2014 to the end of 2019, the amount of total marijuana sales in Colorado, between medicinal and recreational, was $7.87 billion.  Total sales have trended up every year, piquing in 2019 with $1.74 billion. Below is a graph of marijuana sales by year, courtesy of the Colorado Department of Revenue, with distinction given to medical and recreational marijuana. 
One viable option for marijuana-related businesses is credit unions who are willing to participate in the market. One leading example has been Partner Colorado Credit Union, which approved a subsidiary called the Safe Harbor Private Bank (“Safe Harbor”) to house a marijuana banking test program in 2014, and opened for business in 2015.  Safe Harbor separated from its parent entity, Partner Colorado Credit Union, to protect the credit union and membership from reputational risk. Partner Colorado CEO Sundie Seefried said she employed a private banking model to give thorough attention to clients, and to meet FinCEN guidelines. Partner Colorado has since worked with the state government on financial compliance and implementation techniques. 
As Partner Colorado stated, it “prides itself on a local focus, offering services from checking accounts and certificates of deposit to auto loans, mortgages, and small business accounts to the traditionally underserved.”  The two goals of the program are to take cash off the streets to keep the community safe and to create a compliance program to satisfy regulators expectations and meet FinCEN guidelines.  It does this by setting up a solid due diligence program and a subsequent robust monitoring system.
To ensure full compliance, Safe Harbor has collaborated with outside regulators, CPAs, auditors and lawyers to review its business plan and meet with the board of directors to provide feedback.  Seefried has brought in federal and state regulators to conduct a full-scope examination for the entire credit union, including Safe Harbor.  The credit union frequently keeps third-party professionals and regulators in the loop, and by the end of 2016, had conducted three different legal reviews of the entire company. 
As to due diligence for its clientele, Safe Harbor elects for a “compliance model over a service model,”; the mantra of the business is “every dollar is a cartel dollar unless I can prove otherwise.”  Seefried said when she opens accounts, she warns clients Safe Harbor will be “the nosiest, most demanding banker they had ever had.”  She understands this means clients will have to jump through more hoops but it also means proper compliance. Safe Harbor officials claim they know more about their clients than a private investment broker knows about his/her clients. 
In its first year, Safe Harbor worked with 50 clients and 140 different accounts due to the complexity of the corporations using separate assets. Those 50 clients alone accounted for more than 50% of the market share of the market in Colorado.  Even to this point, Safe Harbor only opens five accounts a month because of its meticulous due diligence process.  The credit union also limits deposits to $1.5 million in year one.  This slow process is to ensure every dollar used was a legal dollar.
Seefried said she personally recruited and onboarded all of the program’s first year clients.  Now, it scouts new clients based on recommendations from the initial clients because they would not be likely to recommend a new client that would put their assets or the program at risk. The recruitment process comprises a phone interview, a long questionnaire, a face to face interview, and another structured interview with two Bank Secrecy Act officers present to reinforce compliance.
The criteria for selecting clients is based on time and experience in the industry, focus on compliance, ability to comply and understand issues surrounding banking, organization skills of the candidate, and willingness to be transparent.  When vetting clients, bankers examine clients’ books, examine their monitoring and security systems, ask Cole Memo-related questions, learn about emergency plans if product goes missing, and examine how illegal transactions could be hidden. For example, monitoring a cultivation center would involve questioning about how to potentially hide an unregistered crop. The recruiting process also allows Safe Harbor to pinpoint pricing issues on products compared to the market to ensure proper tax reporting and payments are made to the state.
Once the client is selected, the onboarding process takes about two weeks, including a thorough document collection for FinCEN guidelines. Safe Harbor performs an audit early in the process, touring client facilities and meeting those in charge of the facilities. The credit union asks questions about the business finances and ability to sustain future success, if it is subject to sufficient regulatory reviews, how it trains its employees to ensure regulatory compliance, proof of historical performance to justify cash on hand, whether income statements from the last two years show a profitable operation, and if there is a consistency in between internal financial documents and what’s reported in state and federal tax filings. 
Once the onboarding process is finished, the client is assigned to a private banker with a dedicated cell phone just for that account. The banker contacts the business on at least a weekly basis to touch base and will regularly visit the place of operation.  Safe Harbor ensures all of its bankers are certified by the Bank Secrecy Act. Seefried said typically, Partner Colorado has no more than three bank secrecy officers on staff, but for the marijuana subsidiary, she opted for more than 30 secrecy officers, because anyone dealing with the marijuana banking program should be certified. Seefried also recommends they receive Certified Anti-Money Laundering Specialist credentials. 
The company has weekly BSA officer meetings to explore every type of transaction that presents itself. This also includes weekly internal audits and engaging an external auditor to review files monthly. Those bankers implement a system to score risks with their clients to evaluate further levels of monitoring, with manufacturers and wholesalers representing lower risks and cultivation centers representing higher risks. This includes an assessment of whether clients are engaging in criminal activity, including money laundering. The monitoring system also includes a backend validation program to pinpoint mistakes and anomalies between organizations. 
The credit union deals with high amounts of cash by designing its program to avoid directly handling cash at the branches. There are no branch offices or tellers at Safe Harbor; the clients must make an appointment to speak with bankers or visit the office. When transferring money, the credit union uses armored security to pick up cash from the clients in person and take it directly to vaults, where it can be counted and deposited to Federal Reserve counts. This is to mitigate the risk of robberies. The company also follows a 90/10 rule in which the clients are allowed to conduct up to a maximum of 10% of their business in cash. This rule was imposed because if businesses use large amounts of cash, it makes it hard for the credit union to account where all funds are coming from, how it’s being used and why and to whom they are making cash payments. 
As of 2016, Safe Harbor had more than 50% of the Colorado marijuana market share, and had kept more than $500 million off the streets.  But its success has made for future challenges. Original clients at Safe Harbor are now forming partnerships and forming licenses in other states which makes monitoring more difficult. Colorado State Bank Commissioner Chris Myklebust said Safe Harbor runs a thorough and robust compliance program, but ultimately “we are all subject to prosecution for aiding and abetting the industry…The only way you are going to see something change is when Congress acts.” 
- Congress presents a bill
In 2019, Congress finally took action to remediate the issue of marijuana banking. Colorado Congressman Ed Perlmutter introduced the Secure And Fair Enforcement Banking Act of 2019 (“SAFE Banking Act”) in March and it was referred to the Judiciary and Financial Services Committees.  21 days later, the Financial Services Committee voted 45 to 15 to advance the bill to the full House of Representatives. The bill passed by the House in a 321-103 vote in September.  The bill passed on bipartisan lines, with 229 Democrats, 91 Republicans and 1 independent voting yes. 
The bill is now awaiting a vote in the Senate. In December 2019, Senate Banking Committee Chairman Mike Crapo announced he did not support the version of the bill passed in the House and would not currently put it to a committee vote.  He named four concerns he still would like addressed: the high level of potency in marijuana, marketing tactics to children, a lack of research on marijuana’s effects, and the need to prevent money laundering from bad actors and cartels.  He advised for more public health and safety requirements such as banks only doing business with marijuana-related businesses that use products containing less than 2% THC. This is impractical and unlikely to succeed because it would still limit a large number of marijuana-related businesses from banking; the average level of THC in Colorado is 18.7%. 
The American Bankers Association, Credit Union National Association, Independent Community Bankers of America, and National Bankers Association had filed a joint letter to the House Financial Services Committee supporting the bill. While the institutions clarified they do not support marijuana legalization, they added, “The current threat of criminal and civil liability under federal law is suppressing the provision of vital financial services in the thirty-three states that have legalized marijuana in some form.” 
Section 1 of the bill describes the purpose: “to increase public safety by ensuring access to financial services to marijuana-related legitimate businesses and service providers and reducing the amount of cash at such businesses.”  Section 2 demands that a federal banking regulator not 1) terminate the insurance of a depository institution for providing services to marijuana-related business 2) prohibit said institution from providing financial services to the business and 3) recommend or encourage the institution not to offer those services.  The bill also offers protection to ancillary businesses who conduct transactions from marijuana-related businesses. Even transactions involving proceeds from a marijuana-related business are protected. 
The bill also clarifies procedures for filing suspicious activity reports. Section 6 would amend Section 5318(g) of the U.S. Code by relaxing the requirements on financial institutions to file these reports.  As of now, institutions like Safe Harbor in Colorado are compelled by FinCEN guidance to write a suspicious activity report for every transaction conducted with a marijuana-related legitimate business. This amendment would require FinCEN to issue revised guidance on suspicious activity report filings to not “significantly inhibit the provision of financial services” to marijuana-related businesses.  This would likely alleviate the thousands and thousands of suspicious activity reports it currently receives. 
If the bill were to get through committee, it is possible Senate Majority Leader Mitch McConnell would deny a full Senate vote. In February of 2020, he said he’s aware he has nearly 400 House bills sitting dormant in the Senate that he will not pass. He did not make clear whether the SAFE Banking Act was one of those bills that he would not pass. For context, the STATES Act — a bill that would recognize marijuana legalization federally — was proposed on June 7, 2018 and has 206 cosponsors in the House and 33 cosponsors in the Senate. President Trump has signaled he would vote for it and Attorney General William Barr said he preferred it to the current landscape.  Yet, nearly two years later, that bill still has made no headway towards a vote in the Senate.
- Future viability of these mechanisms
- General Overview
On February 3, 2020, Colorado Governor Jared Polis and the Department of Regulatory Agencies held a press conference to release a new roadmap in conjunction with Sundie Seefried.  The press conference integrated the ideas involved in this paper: the importance of state regulation, compliance directives in the model of Safe Harbor, and commentary on the future of federal legislation. Congressman Ed Perlmutter appeared at the press conference, reassuring the public that he and other lawmakers are working with Senator Crapo on his proposed bill revisions.
- The Tri-state Area
The three proposed solutions analyzed — state regulation, credit union compliance, and federal legislation — could be informative to the local Tri-state area if legalization proves to be around the corner. New Jersey will put forward a public vote referendum in November to determine whether a legalization effort will move forward. The question will ask voters if they’ll approve recreational marijuana for people 21 years and older. Legislators had previously failed to advance a bill to legalize in March. If the vote passes, it will add marijuana legalization as a constitutional amendment, effective January 1, 2021. This would be the first state to legalize in the Mid-Atlantic region. Governor Phil Murphy has already come out in support of legalization. 
In Pennsylvania, Lieutenant Governor John Fetterman embarked on a 67 county listening tour over the summer of 2019. When it ended, he and Governor Tom Wolf filed a report sharing its findings, in part that a majority of Pennsylvanians supported legalization. In September, the two also asked the legislature to pass a bill decriminalizing non-violent and small marijuana-related offenses, and to debate and consider the legalization of adult-use, recreational marijuana. Governor Wolf has confirmed that he would approve such a bill. 
In Delaware, a bill to legalize marijuana cleared the House Revenue and Finance Committee in the General Assembly in the summer of 2019. State Representative Ed Osienski, the sponsor of the bill, said he expects it to move to the House floor some time this year. In 2018, a similar vote had failed to pass the House by four votes.  Governor John Carney said in 2018 that he would vote no on a bill to legalize marijuana but has not come out with a position on the new bill. 
- Solution analysis
With the needle trending in the direction of legislation for the Tri-state area, and the country writ large, an analysis of these mechanisms is warranted. All three solutions provide strengths, weaknesses, and looming questions of federalism.
The Illinois state regulatory structure creates benefits for its institutions in that there is a centralized system for communication and transparency. The structure imposes three financial institutions to collect taxes and fees on behalf of multiple state agencies, assuring state compliance. This includes the Department of Revenue, the Department of Financial and Professional Regulation, the Department of Agriculture, and the Department of Public Health. This is an advantage over other states; Colorado State Bank Commissioner Chris Myklebust said he cannot currently share or receive information from the Colorado Department of Revenue, which is a problem because they have all the seed to sale, growing and waste-stream tracking systems. 
Additionally, the Treasury-planned marijuana summits allow for an integrated network amongst the institutions to be more collaborative and open. Experts in banking, law, and regulation ensure that the most relevant information is shared with one another. The summits also showcase experts from different states to get a different perspective on new ideas.
The Community Invest Marijuana Banking Services Program allows for further transparency and compliance because participants are required to apply and disclose information to the government to become an approved program depository. First, it allows the State Treasury to organize and classify its institutions in relation to marijuana-related businesses: it distinguishes between institutions receiving more or less than $250,000. Next, institutions must supply detailed business plans to the State Treasury, including risk assessments, due diligence plans, and mitigation strategies. 
Ultimately, this provides reassurance to marijuana-related businesses and financial institutions that they will not be prosecuted on the state level. As long as they are compliant with the state bill and the State Treasury oversight, it is likely they will not risk prosecution. The structure allows these institutions to work in lock-step with the state to ensure they are complying with the law.
However, the question remains whether the Illinois state law itself would hold up in a potential conflict with federal law. The Illinois State Treasury says it has anticipated the marijuana banking issues since 2017, when it began sending letters to President Trump. Since, it has sent three letters to President Trump, and one letter each to the U.S. Attorney General and U.S. Treasury. For instance, Treasurer Frerichs sent a letter to Attorney General Jeff Sessions after he rescinded the Cole Memo.  He said, “The absence of the Cole Memos now leaves the industry and financial institutions in the dark.”  Although, Attorney General Barr has since confirmed that the Cole Memo is legitimate legal guidance for states. 
Although there is yet to be litigation on the state legislation, this approach could still likely be overridden by federal law. Preemption jurisprudence finds that the constitutional power of the federal government will override a state or local legislative enactment. In 2005, the Supreme Court preempted that the Commerce Clause can be used to argue for federal enforcement in all 50 states when it comes to the illegality of marijuana under the Controlled Substances Act.  However, this was determined before the Department of Justice issued its marijuana legalization memos, and the Court has decided to not hear cases since then.
Thus, there is a chance that the state of Illinois could make a compelling case for its state law to be heard over federal jurisdiction. It could argue that its state laws are in compliance with the Cole Memo priorities: its transparency prevents marijuana-related business money from going to criminal enterprises or being a cover for trafficking other legal drugs or illegal activity; this would be in adherence with the Bank Secrecy Act. However, it’s unlikely that the state or its businesses would want the future viability of its marijuana economy, comprising hundreds of millions of dollars already, to hang in the balance of a federal court ruling. This federal ambiguity may instill anxiety into state financial institutions relying on state law, which could have their business compromised by a court ruling. While the Illinois model provides a lot of beneficial techniques for state integration in terms of information sharing and transparency, it fails to carry the full weight and reassurance of a federal act.
The Colorado credit union model’s strengths lie in its compliance-heavy approach. Its preference for a compliance-based model over a service-based model means that a federal or state regulatory agency is less likely to find cause for reprimand. Safe Harbor’s thorough vetting of its clientele mitigates risk of doing business with a bad actor, which could put the entire credit union at risk. Its reliance on the only federal guidance available — FinCEN guidelines and Cole Memo priorities — ensures a strong argument of federal compliance, if it ever finds itself in federal litigation.
Safe Harbor also excels at keeping cash off the streets. Earlier this year, Seefried said the credit union is now banking in excess of $200 million a month, and that number continues to grow.  To deter robbers, the union made decals for its clients to hang in their windows that read: No Cash on Premises: Proudly Banking With Safe Harbor Private Banking.  So far, no issues with Safe Harbor marijuana-related businesses have been reported.
The credit union model also presents limitations. As previously stated, Safe Harbor only takes in five new clients each month. Its priority to ensure that every dollar banked is a legal dollar may create a slow-down for potential clients. This model of client-banker intimacy may succeed for the amount of clients Safe Harbor handles, but it does not foster demand in a state-wide economy. It may be an impractical model for larger banks with a higher quantity of clientele, in varying areas of the country or world. A national bank may not have the luxury to employ a single banker to each client, to call each week, and regularly visit its sites, or use a plethora of BSA officers. The complexity of a national institution likely does not provide for that level of closeness and intimacy, which creates compliance issues in vetting out bad actors and illegal money. It also may create a chilling affect for a marijuana-related business that doesn’t want its privacy entirely invaded by its banker. Certain businesses may avoid working with Safe Harbor because of the level of invasion required to do business.
Additionally, Seefried has said certain federal compliance, and Cole Memo priorities, cannot be guaranteed, such as customers crossing state lines, or product being re-sold to minors. She has claimed full 100% compliance in working with the FinCEN guidelines is an impossibility. As to what the credit union can control, it may terminate relationships with businesses if they do not explain sources or payments of cash or if other signed agreement provisions are broken. Seefried said while she can’t guarantee there will be no bad actors, she can identify them and remove them from the program to show compliance to regulators. 
The company’s attorney said he is required to periodically remind Safe Harbor that it is still breaking federal law, and Seefried acknowledges criminal repercussions are a possibility. Safe Harbor has planned for that scenario. Seefried has labeled herself as the private banker for the program in anticipation that she would take personal responsibility for any potential prosecution, as opposed to her staff or the credit union as an entity. She hired a backup executive to share her office and shadow her regularly, so if she were to face legal ramifications, the business could continue operating without a hitch. While Safe Harbor is wise to go the extra mile, the necessity reflects an uncertain landscape and a lack of complete assurance for marijuana-related businesses. 
Federal legislation is the solution to the problem. It would create a federal framework in which states could operate and seek guidance. It would alleviate the anxiety of U.S. financial institutions — national banks, state banks and credit unions — to be able to do business in one of the most blossoming industries in the United States without potential consequence. The suspicious activity report provision of the bill would eliminate the inefficiency on financial institutions’ over-reporting on marijuana-related businesses. Even now, every suspicious activity report is not being examined. Colorado Bank Commissioner Myklesoft admitted that, “we do not necessarily look at what is being filed by our institutions; we just make sure that the financial institutions are taking the time to do these filings.”  This demonstrates that the current system for suspicious activity reports is wasting time and resources for both the government and financial institutions that must file them.
On the down side, the SAFE Banking Act, based off its current existence, would just be a general framework. It is not a lengthy bill. Institutions like state and federal banks would still have a responsibility to prevent financial crime, promote transparency and comply with federal and state demands, as to not violate Cole Memo priorities. The bill would not amend the Controlled Substances Act, so there are still legal questions of whether the SAFE Banking Act or the Controlled Substances Act would reign supreme while marijuana is a Schedule 1 drug. Some of the ideas brought forth by the Illinois Treasury and Safe Banking Credit Union would likely be important for institutions in the future.
Ideally, financial institutions would be comfortable participating in this emerging market because of the SAFE Banking Act’s created immunity from federal prosecution. Then states would pass their own local legislation and agency guidelines akin to Illinois. This would re-assure financial institutions and marijuana-related businesses on a state level to increase participation. The state would incorporate an inter-agency system of communication to enable robust oversight of local marijuana-related businesses, in order to prevent any cover ups of illegal activity. The state could also incorporate a community development program, akin to Illinois, to offer financial institutions access to state investment capital at a lower interest rate, to encourage participation at the start. The state would then also offer guidelines for financial institutions to do due diligence banking, akin to the Safe Harbor Credit Union in Colorado. The banks could employ more BSA officers to oversee more compliance procedures and create a vast screening process when on-boarding new clients. This would also have to be within reason for national institutions, where more intimate, one-on-one type conduct is not plausible. However, these types of compliance measures could create more banking jobs, prevent any foul play running through marijuana-related businesses, and keep federal regulators satisfied.
This ideal framework would help dispensary owners, like John Lord, to operate more freely and efficiently. Under the SAFE Banking Act, federal regulators would be prohibited from discouraging financial institutions’ participation. Since more banks and credit unions would then theoretically be willing to participate under this model, Lord’s business would not have to operate as an all-cash business. Lord’s business would also not have to pay the same exorbitant fees to keep a bank account open, in order to hold its $100 million in annual revenue. Theoretically, with more financial institution participation, there would be more opportunities for bank accounts and lower fees to go with it. With this participation boom, credit card companies would then likely be more willing to process marijuana transactions, creating a more normal economic system for marijuana-related businesses. Through an emergence of federal legislation, state legislation and procedures, and increased financial institution compliance, John Lord would likely never have to walk to an IRS office with a bank of cash again.
When Colorado, the elder statesman of the United States marijuana community, released its new marijuana banking roadmap earlier this year, it demonstrated an appreciation and absorption for these ideas. It aimed to increase the number of financial service providers who serve marijuana-related businesses in state by 20% by June 30, 2020. Like the Illinois State Treasury, the roadmap looked to improve integration amongst state agencies. It included a plan to coordinate with the Department of Revenue on surveying regulated entities within the marijuana market. Also like in Illinois, the roadmap sought to provide state agency guidance to financial institutions. For example, the Colorado Division of Banking is currently distributing aid to state-chartered banks on regulatory matters. Like Safe Harbor, the roadmap implores for regulators and auditors to engage directly with financial institutions to ensure compliance. It also seeks for more education on the Bank Secrecy Act. And ultimately, the roadmap demonstrates a desire for a federal solution, including the submissions of letters to Congressional leadership.  The willingness of Congress to act will ultimately determine the future of banking the marijuana industry.
 Challenges for Cannabis and Banking: Outside Perspectives: Hearing on Examining Challenges that State-sanctioned Businesses in the Cannabis Industry have when Attempting to Access Mainstream Financial Services Before the Senate Banking, Housing and Urban Affairs Committee, 116th Cong. 13-31 (2019) (statement of John Lord) .
 Id. at 13-14.
 Id. at 14
 Id. at 14-15
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 Challenges for Cannabis and Banking: Outside Perspectives: Hearing on Examining Challenges that State-sanctioned Businesses in the Cannabis Industry have when Attempting to Access Mainstream Financial Services Before the Senate Banking, Housing and Urban Affairs Committee, 116th Cong.
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 Id. at 59.
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 Removing Marijuana from the Schedule of Controlled Substances, Drug Policy Alliance, http://www.drugpolicy.org/sites/default/files/marijuana-scheduling_january_2019_0.pdf (January 2019).
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 Id. at 17-18.
 Memorandum from David W. Ogden, Deputy Att’y Gen., to Selected U.S. Att’ys, Investigations & Prosecutions in States Authorizing the Medical Use of Marijuana (Oct. 19, 2009), https://www.justice.gov/archives/opa/blog/memorandum-selected-united-state-attorneys-investigations-and-prosecutions-states.
 Nelson, supra note 28, at 1014.
 Memorandum from James M. Cole, Deputy Att’y Gen., to U.S. Att’ys, Guidance Regarding Marijuana Enforcement (Aug. 29, 2013), https://www.justice.gov/iso/opa/resources/3052013829132756857467.pdf.
 Memorandum from Jefferson B. Sessions, Att’y Gen., to U.S. Att’ys, Marijuana Enforcement (Jan. 4, 2018), https://www.justice.gov/opa/press-release/file/1022196/download.
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 Clarification: No concrete justification has been given publicly for the subpoenas.
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 Search Case Examples Prior to 2015 Using the Drop-Down Menu Below, The Value of FinCEN Data, https://www.fincen.gov/resources/law-enforcement/case-examples?field_tags_investigation_target_id=670.
 Clarification: FinCEN only publishes cases prior to 2015; the cases mentioned do not implicate the legal issues discussed in this paper.
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Marijuana Businesses, Financial Crimes Enforcement Network, https://www.fincen.gov/sites/default/files/shared/20140214.pdf (February 14, 2014).
 Id. at 1
 BSA Expectations Regarding Marijuana-Related Businesses, FIN-2014-G001 at pg. 2, https://www.fincen.gov/sites/default/files/shared/FIN-2014-G001.pdf (February 14, 2014).
 Id. at 3-7.
 Businesses also face risk under the Racketeer Influence and Corrupt Organizations Act. If marijuana, still defined as a Class 1 illegal substance, is cultivated for sale, that could be interpreted as racketeering. See Safe Streets Alliance v. Hickenlooper, 859 F.3d 865 (10th Cir. 2017).
 Gonzales v. Raich, 545 U.S. 1 (2005).
 United States v. Oakland Cannabis Buyers’ Coop., 532 U.S. 483 (2001).
 Id. at 488.
 Id. at 491.
 Conant v. Walters, 309 F.3d 629 (9th Cir. 2002).
 Id. at 632.
 Walters v. Conant Petition, United States Department of Justice, https://www.justice.gov/osg/brief/walters-v-conant-petition
 Conant, 309 F.3d at 639.
 Clarification: This was after California’s medical marijuana legalization but before its recreational marijuana legalization.
 Gonzales, 545 U.S. 1 at 7.
 Id. at 33.
 Id. at 17-19.
 Id. at 22.
 Id. at 42.
 Id. at 29.
 Id. at 18-20.
 Clarification: This is dealt with in the hypothetical; the Supreme Court has not ruled on any such cases since Gonzales.
 United States v. McIntosh, 833 F.3d 1163 (9th Cir. 2016).
 Id. at 1174.
 Id. at 1176-1177.
 Jeff Smith, US Supreme Court declines to hear 280E marijuana tax case, Marijuana Business Daily, https://mjbizdaily.com/us-supreme-court-declines-to-hear-280e-marijuana-tax-case/ (June 28, 2019).
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 Id. at 19-20.
 Tiney Ricciardi, Colorado unveils plan to help bring banking to state’s cannabis industry, The Denver Post, https://www.denverpost.com/2020/02/03/colorado-cannabis-industry-banking/, (February 3, 2020).
 Seefried, supra note 22, at 7.
 Id. at 69-71.
 Id. at 24-26.
 Id. at 69-75.
 Id. at 39-40.
 Id. at 16, 19-20.
 Id. at 61.
 Id. at 86-88.
 Id. at 41-51.
 Id. at 22.
 Id. at 41.
 Id. at 16-17.
 Clarification: A Bank Secrecy Act officer works for a financial institution to ensure it’s in compliance with the Act.
 Id. at 54.
 Id. at 39-40.
 Id. at 55-60.
 Id. at 61.
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