World-renowned wealth management firm Merrill Lynch is adopting a more relaxed stance towards cannabis-related businesses. According to a recent report, the firm is planning on accepting more clients that possess at least some assets associated with the cannabis industry.

Based on a statement that was published on the financial advisory news website AdvisorHub, cannabis clients that are deemed to be in “lower risk situations” may be approved to receive banking solutions from Merrill without an executive’s consent.

“The policy change provides flexibility for clients who have a small part of their overall net worth connected to cannabis-related businesses, according to the company,” noted breaking news source AdvisorHub. “Merrill executives unveiled plans for ‘streamlining’ and adding more ‘flexibility’ to the process of onboarding clients who own or invest in cannabis-related businesses.”

When publishing the statement, advisor hub referenced an internal message from Merrill. Soon after, the authenticity of this message was validated by a company spokesperson. However, the spokesperson did not divulge additional information about the policy change.

Numerous financial brokerages across the United States remain concerned about the potential risks associated with accepting cannabis industry clients; mainly due to the fact that the federal ban on cannabis is ongoing.

About Merrill 

A well-known subsidiary of Bank of America – which snapped up the firm  as part of its wealth management division sometime between 2008 and 2009 – Merrill Lynch was established on January 6, 1914. Nowadays, it goes by the name of “Merrill.” Merrell’s global client assets amount to approximately $1.3 trillion.

The respected financial institution is one of many actively operating Wall Street brokerage firms that participate in financial management and advisory services. Specifically, Merrill assists clients with the sale and purchase of corporate securities, in addition to acting as a broker for standalone clients, governments, corporations and institutions.

Through ongoing collaborations with its investment banking arm, BofA Securities, Merrill is able to conduct a wide range of broker-dealer activities. When Merrill first came on the scene, the company quickly became a pioneer in the investment banking market for providing clients with mortgage-backed collateralized debt obligations (CDOs). This was largely supported by its 2006 acquisition of lending firm First Franklin Financial.

Cannabis banking troubles plague the industry 

Based on federal U.S. law, the cannabis plant remains illegal for sale, distribution and possession. Because of this, cannabis operations that carry out industry-related transactions with banks and financial institutions may be traceable. What this means is that banking services dabbling in the cannabis sector could fall under fire for money laundering, thus increasing the regulatory, operational and legal risks.

Fortunately, hope prevails for cannabis banking. On April 19th, 2021, the US House passed a proposed chunk of legislation titled, “The SAFE Banking Act.” Officially known as “H.R. 1595” or the “Secure and Fair Enforcement Act,” the bill prevents federal banking regulators from punishing depository institutions if they provide banking services to a legitimately-operating cannabis business. 

The future of banking for the legal weed industry is largely dependent on the Act, since it could help to shield business owners from fraud, all the while protecting consumers.