Only weeks after Oregon’s marijuana shops opened their doors to adult sales, close to 30 members of the Oregon Cannabis Association will head to Capitol Hill this week to inform US legislature and urge support for legislation to provide legal marijuana businesses the same access to the financial services and standard tax deductions that every other business depends upon.
As of today, most financial institutes refuse to work with marijuana businesses because they are concerned that a federal crackdown could cause them to lose their FDIC protection, forcing them to close or exposing them to prosecution under federal anti-drug laws.
However allied businesses like Cascadia Labs, an Oregon company that offers state-mandated testing of cannabis products sold in licensed marijuana shops, has faced repeated obstacles in accessing basic services.
“Our first bank refused to offer merchant services for our business,” said Ashley Preece-Sacket, co-owner of Cascadia Labs. “We switched to a local credit union, but last April they called us out of the blue and closed the account. We are now on our third account. We refrain from discussing the details of our business.”
Many state-licensed marijuana businesses are in a submissive position to operate on a cash-only basis, creating threats to public safety, accounting challenges and headaches for state and federal regulators.
“We work with nearly two hundred licensed dispensaries across Oregon, and most of them pay in cash,” stated Karen Sprague, whose Southern Oregon business, the CO2 Company, processes extracts for medical cannabis patients. “Working with so much cash puts the safety of our sales and delivery staff at risk, and it’s a bookkeeping nightmare. I’ve been a small business owner for more than 25 years, and I have never seen anything like it. We just want to be treated like everyone else.”
In addition, outdated federal tax code denies state-licensed marijuana businesses the ability to take standard business deductions. Many are taxed at devastating rates double or triple those paid by other businesses.
“It’s time to update federal policies and bring them into line with the 23 states – plus the District of Columbia and Guam – that are moving beyond prohibition by ensuring that legal cannabis businesses are treated the same as any other business,” said Amy Margolis, a Portland attorney who represents the Oregon Cannabis Association. “Cannabis business owners want the same chance to succeed, provide jobs, and contribute to their communities. This is a matter of common sense and fundamental fairness.”
Oregon Senators Ron Wyden and Jeff Merkley and Representative Earl Blumenauer (OR-03) have introduced the Marijuana Business Access to Banking Act and Small Business Tax Equity Act in to bring fairness to cannabis businesses.
“I’m thrilled to see the emerging Oregon cannabis industry engaging their political voice in DC,” said Congressman Blumenauer. “These are the people lawmakers need to hear from to understand first-hand the opportunity this industry represents in creating jobs and generating tax revenue. Most importantly, the cannabis industry will build a safer regulated system around marijuana than the status quo of prohibition and a resulting black market. We need the federal government to get out of the way and let these businesses grow – and compete – in accordance with state law. We can start by taxing them fairly and allowing them to have bank accounts like all other businesses.”
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