Marijuana – The Alacermatrix Group

High-Priced Bongs, and Other Ways Pot Businesses Handle Cash – American Baker’s BankThink

Posted on June 20, 2016 - 10:54 pm by Reid Wegley

The good, the bad and the ugly of the legal marijuana business

With medical marijuana now legal in 23 states and recreational marijuana legal in Colorado, Washington, Alaska and Oregon, cannabis is a legitimate growth industry generating substantial income. In Colorado alone, the pot industry is expected to pour an estimated $120 million in tax revenue in the state’s coffers for 2015. Nationwide, medical and recreational marijuana as an industry is expected to net between $2 and $3 billion per year in revenue.

You might think banks would be lining up to do business with these cash-rich entrepreneurs, but nothing could be further from the truth. The banks, rightfully so, in my opinion, assume they are putting themselves at risk with the federal government by engaging in marijuana-based businesses, as marijuana is still considered an illegal substance on the federal level. And the reality is today’s banking industry is all about risk mitigation, especially when it comes to cash-based businesses and the potential for rampant money laundering.

Yet, as I stated above, this is a quickly growing and legitimate industry in the states where it is legal. In its infancy, however, marijuana entrepreneurs are facing a mountain of regulatory and financial issues. The biggest of these issues is the lack of access to banking services. Here are what I’d consider the good, the bad and the ugly stories related to legal marijuana banking and taxation.

To read the rest of this story at American Banker’s BankThink blog, please click here.

Originally published at www.americanbanker.com on February 29, 2016.

Pot is legal…but the income isn’t? – Medium

Posted on June 20, 2016 - 10:48 pm by Reid Wegley

Banking the proceeds remains a crap shoot for legal pot shops

Despite the fact that federal statutes make it illegal, a growing number of states (23 and the District of Columbia at last count) are approving some form of sale of marijuana to the public. These legitimate (by state) businesses have figured out how to securely grow, ship, receive and store their products, but banking the proceeds from these agribusinesses is still a crap shoot.

Banks inherently avoid risk due to the stiff penalties they face for money laundering, an activity largely associated with drugs, so any profits earned from the sale of marijuana are suspicious. As a result, nearly all of the nation’s banks refuse to even offer basic services to these businesses, their owners and employees. This has forced many marijuana-based organizations to move to all-cash transactions — spawning more opportunity for money laundering than if the transactions were handled by the financial services industry.

It’s such a murky area that a bipartisan group of U.S. senators proposed a bill that would legalize banking. . . Click here to read the rest of the story on Medium.com.