The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has released updated statistics showing a steady increase in the number of depository institutions that actively bank U.S. marijuana businesses. As of September 30, 2017, a total of 400 banks and credit unions provided services to marijuana-related businesses, up from 334 as of December 31, 2016. FinCEN’s data is based upon Suspicious Activity Reports (SARs) required to be filed by financial institutions on activity involving a marijuana-related business.

In guidance issued in February 2014, FinCEN required financial institutions providing services to marijuana businesses to file the following types of SARs depending upon the type of services being provided:

  • A “Marijuana Limited” filing, which means that the financial institution’s due diligence indicates that the marijuana-related business does not raise any of the red flags as defined in the Cole Memo and is compliant with the appropriate state’s regulations regarding marijuana businesses. In this category, the financial institution is providing banking services to the marijuana-related business.
  • A “Marijuana Priority” filing, which means the financial institution’s due diligence indicates that the marijuana-related business may raise one or more of the red flags as defined in the Cole Memo or may not be fully compliant with the appropriate state’s regulations regarding marijuana-related businesses. In this category, the financial institution is providing banking services to the marijuana-related business while further investigation is being conducted.
  • A “Marijuana Termination” filing, which means the financial institution decided to terminate its relationship with the marijuana related business for one or more of the following reasons:

– The financial institution’s due diligence indicates that the marijuana-related business raises one or more of the red flags as defined in the Cole Memo.

– The marijuana-related business is not fully compliant with the appropriate state’s regulations.

– The financial institution has decided not to have marijuana-related customers for business reasons.

As of September 30, 2017, FinCEN has received more than 39,000 SARs involving marijuana-related businesses since issuance of the February 2014 guidance. The vast majority of those SARs – nearly 29,000 – were “Marijuana Limited” filings, indicating that the financial institution was providing ongoing banking services to the marijuana business in question. FinCEN has received approximately 2,800 “Marijuana Priority” SARs, and just over 9,400 “Marijuana Termination” SARs, during the same time period.

An analysis of FinCEN’s SAR filing data shows a positive and encouraging trend for marijuana businesses, which have typically struggled to find financial institutions willing to provide banking services. For the first three quarters of 2017, the number of “Marijuana Limited” SAR filings increased every month by an average of 1,258 filings. In comparison, the number of “Marijuana Priority” and “Marijuana Termination” SAR filings increased by an average of only 332 and 118, respectively.