Medical marijuana industry calls for proper banking system
A conflict between state and federal laws has Central Coast medical marijuana businesses caught in the middle.
Many work on a cash-only basis because they can’t get banking accounts. But now a state official wants to change that.
“It makes things very difficult,” said an entrepreneur and medical marijuana shop CEO, who we’re not naming for security reasons.
He said it’s a cash only business and it’s only causing problems.
“Makes everything ten times harder. Makes accounting harder, makes proving we are legitimate, proving we are paying all our money difficult,” the CEO said.
Working at a cash-only business like this comes with its own set of risks. They’re targets for thieves because they’re sitting on a bunch of cash.
“It’s insane to have to carry big amounts of cash around and it creates a risk for the whole community really,” the CEO said. “Kind of have to keep it a secret from the rest of the business community what you’re doing or else they take advantage of you or they won’t talk to you at all.”
Some pot shop owners have gotten creative to keep money safe, even using cash to buy investment properties. These marijuana businesses, legal in the state’s eyes are still not recognized by the federal government, which also regulates the country’s banking system.
“They’ve been threatened with actions, even in states like Colorado and Washington, and those states have now legalized recreational cannabis and they have been threatened with actions by the federal government,” attorney Ben Rice said.
According to the L.A. Times, safety and accountability concerns prompted Fiona Ma, a member of the California Board of Equalization, to call for a resolution allowing banks and credit unions to serve legally run pot businesses.
“Cash is just a lot harder to keep track of,” Rice said. “Clients who have found banks and everything was great for a while and then suddenly the banks said, “sorry we can’t work with you guys anymore.”
This kind of transparency would make sure municipalities get their piece of the tax pie.
“This has been a very difficult process for the county,” Santa Cruz County Supervisor Zach Friend said.
The county’s newly created cannabis committee is tasked with creating policy on cultivation and quality of life.
“I think this committee understands the fact that they are the only ones in the state doing this. And I think they also recognize the magnitude of the decision that they are making. What they design could actually be a model for the state. Especially a model for the state in advance of something, a vote of next year,” Friend said.
Friend said whatever actions the committee takes, could be a blueprint for the state if voters approve recreational pot next year.
