You wanted cash-only? You got it. A Sacramento-based tax office is being overwhelmed with piles of money because cannabis collectives are forced to pay their entire quarterly sales tax payments in cash.
Kimberly, Director of a California dispensary who requested to remain anonymous, says her last deposit was for $30,000. “We’ve been a cash industry forever and it has been quite a problem,” Kimberly told the Sacramento Bee. “We don’t want to drive around town paying our bills in cash. We want to be able to just go to the bank.”
Members of the Board of Equalization (BOE) say that number is nothing—Tax professionals in California process deposits up to $400,000 in cash, or more. According to the Board of Equalization’s own estimates, the organization took home $200 million in cash payments last year. The BOE has looked into bitcoin payments, but that doesn’t appear to be an effective long term strategy. “I don’t think anyone really understands Bitcoin,” said George Runner, a BOE member.
New electronic payment options are being developed, including a handful of new startups like Tokken, Hypur and Kind Financial. The companies hope to replace traditional payment methods like Visa and Mastercard. Stephanie Hopper is the owner of Ballpark Holistic in Denver, Colorado. “We are all kind of chomping at the bit, trying to figure out what to do,” Hopper said. “We’re fighting so hard on so many fronts that taking one thing off of us would be such a relief.”
It’s just one more step in the highly flawed, cash-only system that cannabis businesses are currently forced to abide by. Workers in California know just how dangerous a cash-only business can be. Just recently, a collective owner in Orange County was mutilated after burying a large amount of cash in the desert, and in San Diego, a cannabis collective and smoke shop were both robbed at gunpoint.
There are a few banks willing to cooperate with cannabis businesses in Colorado, but new ones are not coming forward fast enough. This is an ongoing issue in the cannabis industry, and we know that soon enough, there will be solutions for canna-businesses, but when?