EXCLUSIVE: New Anti-Money Laundering, Cannabis Compliance Solution For Financial Institutions Hits The Market

CRB Monitor, a provider of cannabis corporate intelligence, has partnered with Tier1 Financial Solutions.

What Happened

According to information procured exclusively by Benzinga, the companies will leverage Tier1’s Alessa solution to deliver a comprehensive anti-money laundering and cannabis compliance solution for financial institutions to enhance compliance workflows and monitoring.

“The industry growth of cannabis-related businesses (CRB) has been nonstop. We are excited to bring best-in-class cannabis compliance solutions to Alessa clients including banks and credit unions by providing the intelligence and analysis needed to manage CRB portfolio risk exposure and meet regulatory expectations effectively,” said Steven Kemmerling, CEO and founder of CRB Monitor. “The new alliance will combine CRB Monitor’s independent, third-party validation and monitoring database with Alessa’s transaction monitoring and AML compliance capabilities, delivering more seamless access to industry-leading data and expertise to reduce cannabis-related risks.”

Andrew Simpson, COO at Alessa by Tier1 Financial Solutions is also excited about being able to help financial institutions more effectively identify and manage risks and opportunities associated with cannabis businesses.

“Without the proper monitoring and data solutions, it’s very difficult for financial institutions and CRBs to maintain suitable compliance protocols. Once a financial institution has the right information, it can perform sufficient due diligence and develop a risk profile that can outline the types of services it may or may not offer to a business," Simpson said.

Why It Matters

Though marijuana remains federally illegal in the United States, numerous states have legalized its sale and use. Depository institutions face several risks associated with banking with a business that engages in federally illegal activity, such as the sale of marijuana, even if legalized at the state level.

Those risks include potential enforcement actions, criminal liability or losing their charter, which could leave members without services.

To serve the industry, depository institutions need robust cannabis-specific policies and common-sense procedures to stay in line with existing banking regulations. In addition, institutions choosing not to knowingly serve the industry must effectively identify unknown marijuana-related accounts among their customer base.

As a result, depository institutions are increasingly seeking to understand the potential implications of banking cannabis-related businesses (CRBs). The legal status of marijuana in states determines the level of regulatory oversight exercised on a financial institution providing services to a CRB.

What’s Next

CRB Monitor has developed the largest database of cannabis-related businesses, licenses and ownership. Today, leading financial institutions rely upon CRB Monitor and its independent data as a regtech solution to effectively monitor cannabis businesses to meet regulatory expectations and requirements. As of September 2021, CRB Monitor’s banking clients had more than $3 trillion in assets.

As an industry-recognized compliance software solution, Alessa’s anti-money laundering (AML) and fraud prevention solutions are used by financial institutions worldwide, including banks, credit unions, money services businesses (MSBs), casinos and fintechs and fraud prevention solutions. They will now be applied to the cannabis industry.