Here is some important information about Cannabis Industry banking.

‘It is 100% legal under federal law to bank the cannabis industry’

It was less than six years ago that Washington and Colorado became the first states to legalize marijuana for recreational use. While a total of nine states and Washington, D.C., have legalized recreational pot, and 30 states have legalized it for medical purposes, weed companies still operate in a legal grey area because pot is illegal under federal law. The DEA classifies cannabis as a Schedule 1 drug, meaning it has “currently no accepted medical use.” That puts it in the same category as heroin.

Under the Obama administration, then-Deputy Attorney General James Cole issued a memo, known as the Cole Memorandum, that clarified the Justice Department’s stance on pot. The memo, from August 29, 2013, asserted that, for the most part, the Justice Department would not enforce the marijuana ban in states that had legalized it. (Cole laid out a number marijuana enforcement priorities, including preventing drugged driving.)

Following suit, in February 2014, FinCEN, which is part of the Treasury Department, issued its own guidance on how banks could provide services to the cannabis industry without violating an anti-money laundering law, the Bank Secrecy Act. One apparent goal of that memo — to ensure that cannabis companies could find banks.

The guidance noted: “This FinCEN guidance should enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.”

When the FinCEN guidance was issued, banks could theoretically avoid the threat of federal prosecution as long as they complied with its guidelines — including filing Suspicious Activity Reports, or SARs, for transactions related to all marijuana companies. (The recent FinCEN report showing an uptick in banks that work with cannabis companies arrived at its numbers by examining SARs.)

But the Donald Trump administration has threatened the legitimacy of that FinCEN guidance, which itself referenced the Cole memo multiple times. In January, Attorney General Jeff Sessions rescinded the Cole memo, calling marijuana “a dangerous drug” and asserting that “marijuana activity is a serious crime.” While Treasury Secretary Steve Mnuchin told Congress in February that he wanted the cannabis industry to have access to banks, that might provide little assurance to notoriously risk-averse financial institutions.

“At the end of the day it is 100% illegal under federal law to bank the cannabis industry because of the Bank Secrecy Act,” said business lawyer Hilary Bricken, who writes a column on cannabis policy and regulation for Above the Law. She added, “None of the big banks … openly do business with cannabis companies … These are massively conservative institutions and are probably more regulated than any other institution in the U.S.”