70% of more than 1600 dispensaries in the state are still dealing in cash
Bay Area marijuana retailers who went fully mainstream this month were forced to act like gangsters anyway as they rumbled down freeways and across bridges in sport utility vehicles and sedans and, in at least one case, a Tesla, bearing cash piled in shopping bags and suitcases. The money was headed for the collectors at the San Francisco and Oakland offices of the California Department of Tax and Fee Administration, which are handling tax payments under the 2016 state law that legalized recreational cannabis. Everyone agrees the bundles of moola are a lure for criminals, but merchants who can’t access traditional banking have no other way to settle up. A month after California’s first recreational marijuana shops opened, the industry is mired in a fiscal free-for-all with few answers on how to handle the explosion of cash from rising sales and increased taxes.
Industry leaders estimate that 70 percent of the more than 1,600 recreational and medical dispensaries in the state are still dealing in cash. They must lug stacks of 20s, 50s and 100s to the tax collector every month, payments that are growing after California on Jan. 1 initiated a 15 percent cannabis tax on top of sales taxes. The Wild West situation stems from marijuana remaining illegal under federal law, which prompts banks that might open accounts and extend loans to fear money-laundering charges. In the latest bid for a solution, state Sen. Bob Hertzberg, D-Van Nuys, introduced legislation Thursday that would allow state-chartered banks, credit unions and other financial institutions to open accounts and issue checks for marijuana retailers.
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