Tuesday, April 10, 2018

Marijuana Business Banking

Massachusetts just floated regulations for taxation of recreational marijuana (medical marijuana will not be taxed in Massachusetts) but the question remains where will marijuana businesses put their money? Since marijuana is still illegal under federal law, banking institutions fear that their use of the federal payment system and regulation by federal agencies will subject them to federal criminal liability if they accept deposits and give loans to marijuana businesses. Although there is one Massachusetts bank that claims it will be accepting deposits from marijuana businesses, at present there is very little banking appetite for marijuana deposits. The Massachusetts Division of Banks has no regulations governing marijuana banking and their statement on marijuana business banking is less than clear.

How does this relate to marijuana taxation? Without access to banks, marijuana business must operate with cash only, making marijuana income very difficult to track.  "...if those (cannabis) dollars are not going into traditional financial services like credit unions, those dollars are not trackable, they’re not taxable, and they’re not helping the state move forward...." Some speculate that this will require heavily guarded marijuana cash safe houses. Massachusetts will likely soon have regulations on the books governing collection of taxes on the sale of marijuana, but whether those taxes can be collected is an open question.

No comments:

Post a Comment