Cannabis is not yet legal on the federal level, but some financial institutions are taking the plunge and banking cannabis where it is legal at a state level. Gabe Hidalgo sat down with Thomson Reuters Legal Executive Institute to highlight some of the compliance measures banks must consider when taking on the risk. These include: 

  • Demonstrate to regulators that the institution has compliance controls for monitoring and reporting for this type of business. 
  • Ensure the compliance department is involved at the beginning. By doing this, institutions will avoid having to retrofit their services to meet compliance standards, and save valuable resources and money. 
  • Have a standard template for SARs, provide training to staff, and ensure SARs are filed in a timely manner. To this end, it is critical to ensure that the compliance function has the capacity to file the volume of SARs—and if not, hire or seek outside help to do so before diving in.
  • From a BSA/AML perspective, cash could be intermingled with illicit sources. Banks must be diligent about monitoring transactions and changes in cash flow to identify abnormalities and potential illicit funds. 

Watch Gabe's full interview