Why Cash is Bad for Marijuana
Cash has always been the preferred way to pay for marijuana, mainly because drug-dealers (the old-fashioned source of marijuana for most) don’t take checks, credit cards or debit cards. But having large sums of cash has become “probable cause” in today’s perverse age of the un-winnable war on drugs. On top of that, the “war” was never designed to be won, it was designed to be perpetual. Drug task forces have to justify their very existence, otherwise they can’t continue to draw money from the federal government, which seems to have a bottomless pit of funds.
With Washington State and Colorado marijuana dispensaries gearing-up for what promises to be a great year for sales, these dispensaries will all be faced with a common problem that dates back to the prohibition era. What do we do with all this cash? Banks must report, under federal law, marijuana related transactions as “suspicious,” and there aren’t a whole lot of other safe places to keep large quantities of bills.
Mainly Cash Business
These dispensaries must operate as cash-only businesses, and all such businesses are highly susceptible to robbery. Medical marijuana dispensaries have to pay licensing fees, some in excess of $45,000, plus state sales tax up to $35,000. Not many banks can get by without reporting $80,000 in cash. While some medical marijuana dispensaries can stay under the federal radar by using shell businesses with innocent sounding names, the other dispensaries, most of which have not yet opened, will have to rely on state legislators to come up with a plan that will allow these businesses to use banks like any other industry.
Even still, there is a chance, albeit remote, that these businesses will be shut down by the Feds. The U.S. Department of Justice still considers the sales and distribution of marijuana as a federal crime, even if the states these dispensaries are in, do not. While both Colorado and Washington both have a basic outline of how these businesses will be taxed and how their inventory will be regulated, neither state has yet to produce anything concrete on the matter at hand. And the clock is ticking.