California set to Use Armored Cars to Collect and Transport Legal Marijuana Tax Money

Marijuana

After almost a year of research intended at helping legal marijuana companies access financial services, California is set to start using armored cars to transport taxes obtained from the legal marijuana industry. Come the new year, California will legalize use and sale of recreational marijuana, and become the largest legal marijuana economy. Researchers already estimate the industry to grow to over $7 billion annually.

However, the problem for the new industry is that federal law still recognizes pot as an illegal substance. Eventually, a lot of banks are still hesitant on accommodating stakeholders in that industry. This has led to many of the businesses making cash transactions, and inevitably putting themselves at risk of getting robbed. According to John Chiang, the State Secretary, workers in legal industries should not have to walk around with huge bags of cash to make transactions.

According to the research carried out by Chiang and the Cannabis Banking Working Group, changes should be made to safeguard banks that accommodate the cannabis industry against prosecution, or to fully legalize it. The report also made other recommendations that included;

• Contracting armored car services to collect cash taxes from legal marijuana and transporting them to a secure counting location. Such a service is more efficient and is also safer.
• Research on the possibility of establishing a public financial facility for the quickly booming industry. According to the study, numerous challenging hurdles hinder the formation of a public legal cannabis bank. The challenges involve startup costs, possibility of making losses, as well as getting federal approval.
• Collaboration between local governments to create an online portal that contains all information about legal marijuana. The portal should then be shared with banks to help them further understand how to accommodate the extensive pot industry. The portal would help financial institutions evaluate possible clients, as well as educate them on the set regulations.
• Formation of groups that consist of cannabis-friendly states, banks, and business. These groups would then advocate for reforms to bring about improved financial services to the industry and eventually eliminate massive cash transactions.

In a letter that accompanied the recommendations, Mr. Chiang also stated how federal laws shut down legal marijuana companies at their baby stages. Before the new government, the state had provided banks with guidelines that helped them escape federal suits. However, many of the institutions believe the rules are hard to abide by and do not view them as very protective.

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