After a long time of legal battles to have medical marijuana legalized in the US, the nation has finally given a green light to have this business recognized. This means heavy cash in the hands of the people. When you have such volumes of cash, what do you do with it? Take to the banks. Interestingly the America’s big banks don’t want this cash.
Merchants of both medical marijuana and the recreational cannabis have been contending with a serious predicament. They have had to conduct their businesses almost entirely in cash. The reason for this being the fact that it is exceedingly hard for them to open and operate bank accounts. They can thus not accept and deal in credit cards.
The US Treasury Department through its financial-crimes arm is trying to make it easier for marijuana merchants to deposit this young industry’s growing revenue. The latest count approximated this revenue at around 3 billion dollars every year. All of it is almost entirely in cash. As a way to effectively tap taxes out of this revenue base, the government intends to use the country’s major financial organizations. This way it could keep the cash out of the way of organized crime.
There is a problem with the targeted banks though. Even though the government feels that their strong compliance departments are strategic and could help track this money, most federal bank regulators have so far remained silent on the subject.
This has created uncertainties regarding what is likely to happen to banks should they accept this cannabis cash. The banking industry is therefore confused about what to do. On one hand there is quite a lot of prospect given the 23 free marijuana states together with the District of Columbia are flooded with hard cash awaiting banking services. On the other hand it is unclear what the regulators are holding up their sleeves.
Crucial decisions need to be made fast. Otherwise the marijuana merchants may have to consider only the alternative marijuana payment processing bodies to help them out with safeguarding the cash. In that case the government problem regarding taxation and how best to tap revenues from this industry remains unsolved.
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