When your business is legal, but you can’t access a bank for everyday functions, you have no choice but to become an all-cash venture. There is perhaps no industry that knows this woe better than those in the business of marijuana. But some are now finding that even those businesses that never actually touch marijuana may have banking headaches.
The L.A. Times recently reported on a local businesswoman who alongside her partner launched a packaging company that caters to the cannabis industry. They produce containers, bags, logos, labels, custom-printed jars and boxes. They currently have about three workers and are preparing to bring on three more. They provide marketing and branding assistance to growers and distributors, and the owner describes it as “all very upscale.” The biggest problem, however, has been the banking.
She explained how she met with a single accountant last year who informed her she would likely only be paid in cash and that her workers and suppliers would need to be paid in cash as well. Payroll, sales and income taxes – all of it has to be done in cash. The accountant advised her to stash the cash under her mattress and then somewhere down the line find a time to make a large deposit into her bank account. When she told him that sounded illegal, he shrugged, saying that’s how everyone does it. Continue reading