Cash-only marijuana dispensaries flood California tax office with paper

The Guardian ^ | Tuesday 16 February 2016 | Anita Chabria

[TroutStalker]

The Sacramento branch of the California tax collection agency reeks of marijuana.

That's because it's cash day at the collection center - when marijuana dispensary owners are allowed to bring in paper money to pay their quarterly sales tax bill - and the smell of their inventory clings to everything.

California, like all states with any form of legalized marijuana, faces a growing problem over the federal government's position that cannabis remains a Schedule 1 illegal drug, classified the same way as meth or cocaine, with no legal uses - and therefore no legal access to traditional banks.

That means medical marijuana dispensaries, along with growers, distributors and other marijuana-related businesses that are operating legally under state laws, have no choice but to be cash-only businesses. They can't write checks, deposit money in financial institutions or make credit card transactions.

"We've been a cash industry for ever and it has been quite a problem," said Kimberly, the director of a non-profit dispensary in Sacramento who asked that her last name not be used for safety reasons. "We don't want to drive around town paying our bills in cash. We want to be able to just go to the bank."

[TroutStalker]

Kimberly was at the tax office making a payment of more than $30,000, but officials with the agency, the board of equalization, say that is a relatively small amount. Recently at the San Francisco office, a $400,000 payment came in, carried in "a big bag", said George Runner, a BOE board member. The day before in Sacramento, $150,000 came in as a single payment.

That kind of cash being brought to a non-secure facility raises safety issues, as well as practical ones - issues that the BOE and other agencies are scrambling to address as new medical marijuana laws in the state increase the amount of taxes being paid.

The BOE estimates that last year, it took in about $200m in cash payments from marijuana businesses, though it's "hard to tell" what the actual amount is, since, Runner said, "we don't always know who is a cannabis-related business".

He does know it is leading to some strange problems. The teller windows in the office, for example, do not have slots big enough for the cash-stuffed envelopes to slide through. They will have to be retrofitted to be bigger.

In the meantime, the office staff is forced to come out of their safe rooms to receive payments.

Inside the cash room at the Sacramento office, money is stored in a shiny black safe that looks straight out of the old west, with a large silver spin dial on the front and a gold Betty Boop statue on top. Though about 4ft tall, the safe still sometimes gets stuffed to capacity.

[grey_whiskers]

This is gonna cause problems with drug-sniffing dogs as the money circulates to other states in which marijuana is still illegal.

Gonna make a fun Supreme Court case.

[DoughtyOne]

[RIghtwardHo]

Idiot Feds need to legalize it, or at LEAST let them deposit it and leave legalizing it up to the States.

[cuban leaf]

I’m shocked that they are claiming all that income.

[jessduntno]

Cash only business with no regulation. I’m pretty sure that all the tax money isn’t getting through. It could probably be a LOT worse.

[Trumpinator]

Cash only business with no regulation - as pro conservative as it gets. No?

[Responsibility2nd]

OK, so if you have the Idiot Feds legalize it - are you going to FORCE the banks to accept illicit drug money accounts and deposits?

Much the same way the Idiot Feds FORCE businesses to conduct gay marriages?

[Mark]

Well, at least it is not evil tobacco.

[Responsibility2nd]

The Nanny State goon squads are watching these dope businesses.

Which is and was the goal of libertarians and the quest for legal dope:

More government and more taxes.

[ichabod1]

Well it wouldn’t be illicit then, would it.

[riverrunner]

They are claiming what they claim.

[discostu]

Nobody wants to go down like Capone.

[Responsibility2nd]

Well it wouldn’t be illicit then, would it.

______________________________________________

Yes it would. Prostitution is illicit. Even in places where it’s legalized. It still is illicit.

Illicit | Define Illicit at Dictionary.com

dictionary.reference.com/browse/illicit

Dictionary.com

not legally permitted or authorized; unlicensed; unlawful. 2. disapproved of or not permitted for moral or ethical reasons. Origin of illicit Expand.

[The_Victor]

That kind of cash being brought to a non-secure facility raises safety issues,

I'm sure safety is such an overwhelming issue that the state would consider doing with the tax revenue in order protect lives.

[familyop]

Dirty little secret about the issue:

State of Colorado Debt Clock
http://www.usdebtclock.org/state-debt-clocks/state-of-colorado-debt-clock.html

States aren’t getting rich from it.

[The_Victor]

consider doing with the tax revenue

consider doing without the tax revenue

Operator headspace

[Responsibility2nd]

And can you imagine if the cops stopped you (broken taillight) while you were bringing 30 or 40 large to the tax office?

They would seize that in a heartbeat. Can you say “Asset Forfeiture”?

lolol

[ßuddaßudd]

And they cant spend it fast enough . .

[Marie]

Because of federal law, no bank can do business with a MM disp.

They are FORCED to be a cash-only business.

Yet they keep their paperwork and install vaults and do everything to make the government happy.

They’re paying their taxes.

Now the gov’t is mad because the money stinks?

Really?

When has the gov’t ever cared about the smell of money?

They’ve got their 30 pieces of silver in the exact way that they demanded. They can shut up about it.