Tags: Marijuana | marijuana | billions | cash | cant find banks | federally chartered

Legal Pot Companies Can't Find Banks Because of Federal Laws

Legal Pot Companies Can't Find Banks Because of Federal Laws

Sunday, 26 November 2017 02:31 PM

Marijuana will be a booming business in California next year, with expected revenue of $5.2 billion — but there are few banks that’ll stash the cash, Forbes reported.

The recreational use of pot becomes legal New Year’s Day — and the state itself will collect about $1 billion in taxes from the sales, Forbes reported.

But banking and financial services for the growing industry are generally unavailable — and federally illegal, Matt Karnes, industry analyst and managing partner of New York's GreenWave Advisors, told Forbes.

As a Schedule One substance, cannabis is categorized along with substances like heroin, and banks risk losing their federal charter if they work with cannabis companies, the analyst told Forbes.

For now, many pot businesses have to operate in cash-only mode, relying on safes, video camera systems, security guards and armored car pickups, Forbes reported.

Some operators simply hide the nature of their business from banks, while others turn to cryptocurrencies like Bitcoin, which have “questionable ability to pass regulatory scrutiny,” because they are so complex, Karnes told Forbes, adding their lack of transparency also “remains a major stumbling block.”

But according to Forbes, President Donald Trump’s aim to roll back banking regulations may ultimately make cannabis banking easier.

The news site notes the the Sarbanes Oxley Act — created to, among other things, reduce accounting fraud by asking company executives to certify their financial reports as accurate — may be part of the rollback.

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Marijuana will be a booming business in California next year, with expected revenue of $5.2 billion - but there are few banks that'll stash the cash, Forbes reported.The recreational use of pot becomes legal New Year's Day - and the state itself will collect about $1...
marijuana, billions, cash, cant find banks, federally chartered
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2017-31-26
Sunday, 26 November 2017 02:31 PM
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