Legal pot businesses would love to take cash to the bank
Retailers who sell marijuana, even in states where it’s legal, may have access to bank accounts – eventually. Attorney General Eric Holder said the administration may propose new rules to deter prosecutors from prioritizing legal marijuana sellers. In the meantime, marijuana dealers continue to pay a high price to operate only with cash.
Retailers of legal recreational marijuana in Colorado say business is good. Tim Cullen, co-owner of Evergreen Apothecary and Colorado Harvest Company, says while perhaps a cash-only business would work for some small companies, he’s at the point where not having a bank account is not an option.
“We have over a 100 hundred employees. At this point, we lease six different buildings. We will pay somewhere north of $100 thousand in sales tax this month,” he says.
There’s just one drawback to selling all that cannabis – all the cash. According to federal law, marijuana is illegal – so banks won’t take retailer’s money. That means businesses like Cullen’s have to find a work around.
“We use a third party that we pay pretty substantial fees to. That allows us to have access to bank accounts.”
A “third party”? Is Cullen renting a bank account? Borrowing one from a friend, with an accompanying fee?
“I’m going to leave it at vague and mysterious,” says Cullen, “because I need to keep my bank accounts open.”
But most marijuana sellers, notes Taylor West, Deputy Director of the National Cannabis Industry Association, are stuck with cash only.
“People are literally having to bring bags of cash in to pay licensing fees, state taxes, even utility bills that can run in the thousands of dollars a month,” she says.
Then, says West, there’s the issue of safety.
“We have heard of members that have to use decoy cars and multiple people leaving at the same time and going in different directions.”
But all retailers still have to pay state sales tax. (Colorado businesses take note – February 20 is the last day you can pay taxes for the month before). And until the rules change, the Colorado Department of Revenue would like retailers to know that it accepts state tax revenue in a number of ways, and cash, it says, is one of them.
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