What Is a Suspicious Activity Report (SAR)?

What Is a Suspicious Activity Report (SAR)?

Banks file Suspicious Activity Reports (SARs) when transactions appear unusual or inconsistent. Cannabis businesses are subject to enhanced SAR monitoring.

What This Page Covers

  • What a SAR is
  • Why cannabis businesses trigger enhanced reporting
  • What types of activity lead to SAR filings
  • What happens after a SAR is filed

What Is a SAR?

A Suspicious Activity Report (SAR) is a confidential report filed by a bank with federal regulators when activity appears unusual or high-risk.

Under the Bank Secrecy Act, banks must monitor and report suspicious transactions.

Cannabis businesses are subject to mandatory monitoring.

Why Cannabis Businesses Trigger SARs

Because cannabis remains federally illegal:

Banks must file either:

  • Marijuana Limited SAR
  • Marijuana Priority SAR
  • Marijuana Termination SAR

These classifications reflect risk level.

Common SAR Triggers

  • Large unexplained cash fluctuations
  • Deposit patterns inconsistent with business type
  • Undisclosed ownership changes
  • Activity suggesting diversion

SAR filings are confidential. Businesses are not notified.

What Happens After a SAR

  • Enhanced monitoring
  • Possible document requests
  • Account review
  • Potential termination

A SAR does not automatically mean closure, but it increases scrutiny.

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