SACRAMENTO (CBS13) — California leaders are looking at ways to solve the marijuana industry’s multi-billion-dollar conundrum.
“The No. 1 problem they have is based around banking,” said Anthony Biagi.
He runs an accelerator for people looking to build a cannabis business. He and his attorney Dale Schafer have seen firsthand how the industry operates.
“It’s cash. It’s all cash,” said Schafer.
Right now, any bank with federal ties won’t accept marijuana money.
That means debit or credit cards won’t work for purchases at pot shops. Business payroll and taxes are all paid in cash.
And the locations themselves are secured like fortified safes with added security measures.
“Burying it in your backyard. Putting it in your mattress only lasts so long and then you have more cash then what you know what to do with,” said Schafer.
On Tuesday, State Treasurer John Chiang suggested the use of armored vehicles to collect tax payments and shuttle the cash between the businesses and state coffers.
“Much more time and costs to make sure you’re properly reporting all the transactions you’re required to report and monitor these businesses,” explained Sheryl Kirchmeier with Salal Credit Union in Washington.
Their credit union already uses fortified vehicles to collect payments. She says finding a courier was a challenge.
“We had to look at quite a few businesses before we found one that was willing to do those pickups,” explained Kirchmeier.
In Washington, some businesses can work with credit unions, but there is still the legal limbo as marijuana is considered a Schedule 1 narcotic in the eyes of the federal government.
While solutions to California’s cash problem are sorted out, marijuana shop owners are left with few risky options to comply with the law.
“Traveling with large sums of cash is frightening,” said Schafer.
The report by the Cannabis Working Group also recommended exploring the possibility of a state-run bank for cannabis businesses. Another recommendation included joining with other states to push for federal marijuana law reform.
Legal recreational cannabis sales begin on Jan. 1.