Marijuana may be legal but dispensaries are still operating in the shadows. Washington and Colorado have legalized marijuana, but financial institutions are still reluctant to do business with an industry whose product is still illegal under the Controlled Substances Act.
Since banks will not risk the charge of money laundering by doing business with the marijuana industry, marijuana businesses are disguising the nature of their businesses by operating in cash. Marijuana CEOs often bring the day’s profit to the banks in thousands of dollars of cash, and complain that the restrictions make it impossible to run a legitimate business. One marijuana supplier confessed to CNN that she concealed the nature of her business from bank representatives by hiding cannabis posters.
Operating on a cash-only basis also creates security risks and complicates the state’s efforts to tax marijuana, a primary argument for legalizing marijuana in the first place. State tax regulators are hoping to monitor marijuana sales by keeping a close eye on how much marijuana is produced.
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