Navigating the US “Green Rush”: anti-money laundering and de-risking implications for banking cannabis-related businesses in Jamaica

Published date18 November 2021
Date18 November 2021
Subject MatterAccounting & finance,Financial risk/company failure,Financial crime
AuthorRohan Clarke
Navigating the US Green Rush:
anti-money laundering and
de-risking implications for
banking cannabis-related
businesses in Jamaica
Rohan Clarke
Faculty of Law, University of the West Indies, Mona, Jamaica
Purpose This paper aims to illuminate the divergingapproaches to marijuana-related drug enforcement
at the federal and state levelsin the USA, which have facilitated a boom in the US medical cannabis industry
(i.e. the Green Rush). It further sheds light on how the USAaggressive extraterritorial approach to anti-
money laundering (AML) enforcement might simultaneously suppress the banking of cannabis-related
businessesin Jamaica due to the lingering fear of de-risking.
Design/methodology/approach An international and comparative legal and policy analysis was
conducted of the nexus among shiftingdrug enforcement policies, AML laws and the banking of cannabis-
related businesses.
Findings This study found that the constitutional relationship between the US federal government and
states has created a de facto comparative advantage for the US medical cannabis-related businesses that
benef‌it from limited access to f‌inancial services. This was found to pose far-reaching implications for the
banking and development of the Jamaican cannabis sectordue to the dependence of the countrysf‌inancial
institutions on correspondent banking relationships with the US banks that are regulated by federal AML
Originality/value To the best of the authors knowledge,this paper is the f‌irst of its kind to examine the
extraterritorialregulatory risks to the banking of cannabis-relatedbusinesses in Jamaica.
Keywords Money laundering, Cannabis-related businesses, Green rush, Correspondent banking,
De-risking, Pandora papers, Offshore f‌inancial services
Paper type Research paper
The Green Rush, or boom in medical cannabis-related businesses (Scheuner, 2020), is
f‌inally making its way to Jamaican shores. To the eager onlooker, this emergence of a
regulated medical marijuana sector is somewhat anticlimactic since the Islands infamous
high-grade weed(as the reputed high-quality marijuana is commonly referred to locally)
has been globally popularised by the late Robert Nesta BobMarley in his legendary
reggae music and the indigenousRastafari religion. Interestingly, nonetheless,from 12 to 13
October 2021, the Jamaica BankersAssociation convened its tenth Anti-Money Laundering
and Counter-Financing of Terrorism (AML/CFT) Conference under the theme, Lets Get
Radical- Navigating the New Normal. In this context, a panel was convened on The Two
Sides of the Coin- Banking Cannabis-related Businesses. This is a clear signal of the local
banking sectors appetite to provide f‌inancial services to cannabis-related businesses
seeking to tap into the emerging multi-billion-dollar international value chain, currently
dominated by the US licensed entities. This initiative is also a clear appeal to the
Journalof Financial Crime
Vol.29 No. 2, 2022
pp. 564-575
© Emerald Publishing Limited
DOI 10.1108/JFC-10-2021-0235
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