As this issue continues to evolve, I wanted to see who is/is not lending to landlords with known MRB tenants - specifically tenants offering medical marijuana services in states in which it is legal? If you lend to the landlord do you file continuing activity limited SAR's for the life of the loan?

The risk of lending to the landlord is more about your collateral being at risk of seizure if the tenant runs afoul of the Department of Justice, ATF, etc.

FinCEN's Maijuana Guidance has been the same since 2014. You do not file "marijuana limited SARs" on businesses providing services to marijuana related businesses, but you may have an obligation to file a "garden variety" SAR if you determine you customer is deriving funds from illegal activity. See Footnote 7 in the Guidance.

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I agree with Brian. We do have a few of those and we do not file. Plus, I have an e-mail (in writing) from Fincen stating we would not in the case you describe.

Thank you both for your response.

We have an examiner telling us that we should treat the tenant as if they were our customer (make sure they are licensed in the state and in good standing, verify their primary source of income, corporate documents and licensing information). This seems excessive to me. I was wondering what due diligence you are getting on the MRB tenant.

That sounds way over the top. I don't know what state you are in, but I know that licensed MRBs in my state have significant regulations and monitoring. Beyond verifying that they are licensed and doing some negative media research I wouldn't go that much more in depth if the tenant was not my customer.

We are located in Alabama, but our customer is located in Florida where medical marijuana is legal. I told the examiner that we would obtain the tenant's licensing with the state, a copy of the lease agreement, the percentage of revenue coming from the MRB and rent rolls. He was good with that.