At the moment, four states have legalized recreational marijuana and that number will likely expand even if Ohio recently rejected the decision to legalize marijuana. Now that more and more states are legalizing marijuana, the marijuana industry is becoming much more profitable. Just in Colorado, recreational marijuana made $700 million and could even reach $1 billion in 2016, according to the Washington Post. Although the money is completely legal, most makes refuse to take the money accumulated from marijuana.
The reason that the banks will not take the money is because marijuana is still illegal under United States law, and banks are expected to comply to federal regulations. It would still be legal for the banks to take marijuana money without violating federal law, but many steps would need to be taken to make sure they are not breaking the law. Vice President of the American Bankers Association, Rob Rowe, stated that if banks do not accept funds from marijuana companies and something goes wrong, the bank may lose its charter.
For sundry banks throughout the United States, the extra steps are not worth it. Only 220 of America’s 7,600 banks and credit unions accept money from marijuana businesses according to Bloomberg in October. So this means that legal marijuana is a cash-only industry. This remains an issue for consumers because they must pat for marijuana in cash, but is an even bigger issue for growers and distributors.
“A lot of people hear ‘cash only’ and think that means they can’t accept credit cards,” Director of the National Cannabis Industry Association, Taylor West, said to ThinkProgress. “That’s true, but the real complications come on the backend. You’re paying your staff in cash, your utility bills, your mortgages, and your taxes. Not being able to handle these transactions electronically is just incredibly difficult.”
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