Institutions serving industries that are lawful under state law but federally restricted, or that are simply cash-intensive, face heightened expectations rather than a prohibition.
The framework. Guidance directs institutions to conduct enhanced due diligence, verify licensure and compliance with the state programme, understand the normal expected activity, and monitor for red flags including activity suggesting diversion or involvement of criminal enterprise.
Filing expectations. Specific reporting designations distinguish accounts operating within the state framework from those raising concerns, with periodic updates.
Practical due diligence. State licences and their status, ownership and beneficial owner verification, site visits, review of state seed-to-sale reporting where available, revenue reasonableness against reported activity, and monitoring for structuring.
Cash handling. Volume of currency deposits, vault capacity, transport arrangements, and currency reporting.
Other higher-risk categories with analogous expectations include money services businesses, precious metals dealers, independent ATM operators, professional service providers holding client funds, and certain internet-based businesses.
De-risking. Regulators have discouraged blanket exit from entire categories, directing institutions to assess relationships individually. An institution that declines an entire industry should be able to explain the decision as a risk-appetite judgment rather than a compliance conclusion.