My state does not have any legal marijuana, either medical or recreational. We have a growing number of customers who have invested in marijuana grow facilities or dispensaries in states where it is legal. (I'm sure there are more than we know about, we get flagged by names like "HighGreen Buds" or similar obvious names.) Since the investors are depositing funds that are derived from MRB businesses that are growing/selling a product that is still illegal on the federal level, how do we classify these investors? Do we consider them an MRB? I'm curious what other banks do for customers like this.

I have yet to run into something like this. I would run this by an attorney who is qualified to opine on these matters.

im going to throw my hat in the ring if nothing else to learn more - our bank does not have any MRB so i have no first hand knowledge.

you use the word "investor" would that imply or mean any knowledge of controlling interest in the MRB? just looking for clarification. a Tier I question.

or would they be a Tier III?

I agree you should speak with legal council as this issue can grow out of control very quickly.

If you use a tier list this I would think is Tier 1 as it has controlling interest. That said it is up to you to decide this information. It is up to your institution to choose to bank these types of accounts as well.

If you say you do not bank MRBs of any nature you have quite a bit to talk about with your internal group for derisking or something similar. You can't have a stance that you don't follow. We bank some MRBs but I would take this situation to a group panel we have quarterly to discuss tough issues as well as possible legal council participation.

We have learned that our customer in my original question is a half owner of the MRB (a grow facility), and isn't just an investor. He will be told that he can no longer deposit his MRB income into our bank. Assuming that he does so, how do we classify him going forward? He is technically an MRB. If he no longer deposits his MRB income into our bank, do we have to continue to list him as high risk and an MRB?

It's my understanding that FinCEN considers persons who earn money directly from the sale of marijuana to be marijuana-related businesses. They did not intend for the definition to include ancillary persons, such as people receiving income, adjacent persons like hydroponic stores, or people who just occasionally receive payments like public utilities companies. While many banks find tiers useful, it's not part of any official guidance.

I would not consider your customer to be an MRB, but that's something that needs to be defined in your P&P. Regardless of how you define it, it's also your decision whether to allow the activity, keep the customer, or to maintain them as high-risk. Regulators do not mandate than any customer must be high-risk, including MRBs.

If we instructed a customer not to do something, we would maintain them on a review schedule until we were confident they stopped doing it.

I am in a non marijuana state so I have no experience. Are state governments exempt (they do collect sales tax directly from the sales)....