The marijuana and banking industries may seem like an unlikely lobbying duo, but both are tuned into Washington D.C., where a bill currently meandering through a Senate committee could open the regulatory door for the two to work more closely together.
Although marijuana has been legalized in some way in more than 30 states—including Louisiana—its ban at the federal level has largely cut the cannabis industry off from banking services, leading many companies in the industry to operate by cash only.
Operating on a cash basis, however, is risky and can open up a multitude of problems for companies, including security threats and difficulty in accessing credit, says Chanda Macias, president of Ilera Holistic Healthcare, which grows therapeutic cannabis for Southern University.
There are also tax implications. Because of the plant’s status as a Schedule I drug by the U.S. DEA, marijuana-related companies can’t write off their business expenses, only the cost of goods sold, and can pay up to 70% of revenues in taxes, estimates Macias, who owns marijuana dispensaries in Washington D.C.
Those businesses without a bank account are also unable to pay their tax bill electronically, leaving them to send an employee to carry large sums of money to the local IRS office.
“At times, you might be counting money for days before you can even pay an IRS bill,” Macias says, adding some banks that agree to work with cannabis-industry companies may only agree to provide basic…
A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries.