Treasury services are involved in every commercial cannabis business. The risk posed by treasury services is specific to each commercial cannabis business.

The money laundering risk in treasury services varies for each commercial cannabis business. The primary reasons for the varying risks are attributed to the nature of the specific product or service used, speed at which funds are processed, reduction of record keeping, or facilitation of anonymity.

When applying a risk-based internal control environment, it is essential that the control activities reduce the identified inherent risk.

Control activity

These inherent risks are best controlled through formal control activities establishing effective cash management, vendor management, and ethics and whistleblowing control activities.

The following sections examine the risk factors, red flags, and mitigation techniques for these issues.