Pot is legal in 10 states, but the industry still can’t use banks. Will Congress change that?

Posted on Monday, 11th February 2019 @ 10:38 PM by Text Size A | A | A

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When a tax deadline approaches, county officials in the heart of California’s marijuana country ring up millions of dollars in cash deliveries from licensed growers.

Around the rest of the state, deep-pocketed cannabis growers and retailers make appointments three weeks in advance when they want to hand-deliver stacks of cash to the two dozen state tax offices that accept Benjamin Franklins.

The money comes in, but neither the government nor the marijuana companies are particularly happy about hauling around so much cash.

This week the House of Representatives plans to hold a hearing on legislation that could lead to licensed cannabis companies gaining easier access to banks six years after states began legalizing marijuana for recreational use. Representatives had raised the idea in the past, but it didn’t get anywhere in the Republican-controlled Congress.

For more than six years “we were not given one hearing, so the fact that we have an opportunity to even discuss cannabis banking next week represents a huge step forward,” said Rep. Ed Perlmutter, D-Colorado.

Because marijuana is still considered an illegal drug at the federal level, banks that deal in the industry could be liable for charges of money laundering if the Department of Justice chose to prosecute them. Rather than take that risk, many banks have elected to not participate in the industry, which has been legalized for recreational purposes in 10 states and the District of Columbia. Even more states allow people to use marijuana for medical purposes.

“Around one in four Americans find themselves living in a state where recreational use of marijuana is legal, and a vast majority of Americans live in a state where medical use of cannabis is permitted,” said Rep. Denny Heck, D-Washington, who plans to sponsor a cannabis banking bill with Perlmutter.

Employees of cannabis companies and government workers alike worry that carrying large amounts of cash will make them targets for criminals. That’s why the California Department of Tax and Fee Administration carefully organizes payments at its offices, and it won’t say how much money it collects in cash.

California officials collected $228.2 million in tax revenue from the cannabis industry in the first three quarters of 2018, according to the tax department. Casey Wells, a spokesman for the department, said less than half of the money came in as cash.

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