California Marijuana Industry Hopes To Make Inroads With Banking Industry
SACRAMENTO (CBS13) — It's an all-cash business, but the cannabis industry says it's one step closer to doing business with banks.
Many banks are unwilling to do business with marijuana dispensaries, saying they aren't worth the risk. But for the first time, the state tax authorities are stepping in to help dispensaries do business.
Marijuana growers and dispensaries are digesting some good news.
"There was some like at the end of the tunnel," said Kimberly Cargile, manager at A Therapeutic Alternative.
She's back from a first-of-its-kind meeting connecting cannabis and financial industries.
While medical marijuana is legal in California, it's still a crime under federal law, so banks and credit unions won't do business with the cannabis business.
"In all the dispensaries throughout California, very difficult to get a bank account for anyone in the cannabis industry. So the entire industry is a cash based industry," she said.
That's where Board of Equalization member Fiona Ma comes in.
"This industry has been living in the shadows for decades," she said.
Ma is proposing that legal marijuana businesses have the same access to banks as other businesses. Currently, dispensaries are forced to bring in bags of cash to the state Board of Equalization, the only agency that accepts them.
"We are a tax agency; we collect and audit. We are not a bank," she said. "But that's what they have to do—come to our office, drop off cash to pay taxes, and we walk across the street to pay their money."
She says not only is the cash-only system dangerous, it's also hurting the state as it misses out on millions of dollars in sales tax.
For now, whether banks will do business with the state's marijuana industry is a game of wait and see.
A proposal to legalize recreational marijuana use in California is slated for the 2016 ballot.
Colorado and Washington have already legalized recreational marijuana use, but their dispensaries face the same challenges with the banking industry.
