California’s Marijuana Industry Is Still Cash-Only
California was the first state to legalize medicinal marijuana but the state still requires marijuana transactions to be made using cash.
Our Los Angeles marijuana lawyers know that the quickest way to look like you’re up to something is to handle all your business with cash so why does California require its legal taxpaying marijuana industry to use only cash?
Recently the United States Justice and Treasury departments announced that they would put an end to the ludicrous practice of forcing marijuana businesses to deliver duffel bags of greenbacks to their landlords, accountants and lawyers.
The recent federal announcement allows banks to accept marijuana accounts as long as the bank can file a “suspicious activity report” for any transaction. In addition the cannabis business must follow the regulations within the state.
Here is the problem: California does not have statewide regulations. The result is that millions of dollars will continue to flow in cash-only form. The only other option, cashier’s checks, can be pricey and cumbersome.
The hope is that this move from the federal government will ignite desire for the California legislature to do something about non-existent regulations. A bill is already pending in the state Senate but the legislature has ignored efforts to make this a reality in the past.
To put it simply, dealing in only cash is a tremendous burden to businesses. Fairly simple transactions that don’t necessarily involve marijuana may still be cash only transactions.
The recent announcements from the feds reflect a slight pulling back on marijuana regulation if the businesses are operating within state guidelines. This means that if regulations are not in place, banks in California would be putting themselves at risk of non-compliance with the Department of Justice’s policy – not to mention the concern for marijuana related businesses.
What’s particularly strange is that cash only businesses are far more difficult to track and audit. In a time when marijuana businesses still have to prove their legitimacy it would make sense to let them, even force them, to use banks.
The inability to use banks means that a vendor can’t accept debit or credit card payments legally without some creative accounting and that really creates a further threat to public safety. It means large numbers of people are forced to deal in cash who would not do so otherwise.
Some dispensaries have found creative ways to deal with these regulations by setting up shell businesses but this is a complicated process and complying with the law should be of utmost importance. The federal government has proven to be anything but understanding when it comes to cannabis related issues.
The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.
More Blog Entries:
Obama Admin Pot Policy Dazed, Confusing to Many, February 23, 2014, Los Angeles Marijuana Lawyer Blog
Medical Marijuana Pioneer Caught in the Teeth of Federal Drug Laws , February 21, 2014, Los Angeles Marijuana Lawyer Blog
How To Get A Job In The Booming Legal Marijuana Business, Oct. 10, 2013, By Walter Hickey, Business Insider
Pot Shops Can’t Take American Express or Deposit in Banks, May 12, 2013, By Alison Vekshin, Bloomberg Personal Finance