Steve Schain Marijuana Banking

Four Reasons Marijuana Banking Remains Rock Solid

As detailed below, and as Reuters article reporting Treasury Department's "FinCEN Guidance remains in place" announcement ​reflects, Marijuana Banking remains rock solid.

Thus, nothing has changed for banks, medical marijuana related businesses ("MRBs") or adult use MRBs, but adult use jurisdictions may, at some point, announce a policy of enforcement. 

Until then, it's "business as usual" including financial institutions' contractual and fiduciary obligations to depositors and civil exposure for torts including interference with existing/prospective contractual relations. 

Why Marijuana Banking Remains Rock Solid

1) Neither Cole Memorandum nor FinCEN​ Guidance have any legal effect, but, instead were policy statements.  Withdrawal of statement, does not withdraw policy.  Unless a new law/guidance is enacted or issued, things stay the same.

2) Cole Memorandum and FinCEN guidance were respectively issued by distinct agencies:  the Justice Department and Treasury Department.  Although his 01/04/18 Memo "rescinds" a February 14, 2014 "Guidance Regarding Marijuana Related Financial Crimes", Mr. Sessions was referencing Justice Department Memorandum and not Treasury Department Memorandum known as the FinCEN Guidance.

Justice cannot rescind memoranda issued by, nor alter the policies of, Treasury.

3) Just like Marijuana may be removed from Schedule 1 or pending "Marijuana Banking Safe Access Act" may be enacted, a time may come where Appropriations Bill does not cover Medical Marijuana or Treasury rescinds FinCEN Guidance.   

4) Until these things happen, all financial institutions are governed both by the current laws, which remain unchanged, and their contractual and common law duties. 

Stated another way, banks which shut down accounts without sufficient legal basis risk civil exposure to depositors' breach of contract and tort claims including interference with existing/prospective contractual relations.

Steve Schain is a Senior Attorney to Hoban Law Group and admitted to practice in Pennsylvania and New Jersey. Steve represents entities, governments and individuals in choosing a structure, preparing and submitting license application, regulation, compliance and litigation, and drafting legislation. A nationally recognized consumer finance litigation, banking law and cannabis law expert, Steve is a The Legal Intelligencer and Cannabis Business Executive columnist, frequent Pennsylvania Bar Institute and National Bar Institute author and lecturer and serves as a court appointed judge pro tempore and arbitrator. He can be reached at