With recreational weed set to become legal in California on January 1, the state is going through a transitional period in order to better equip itself for its upcoming cannabis-fueled era.
There are several roadblocks, however, that need to be sorted out before the new year.
One such problem, in a sense, is a good thing. The industry is expected to accrue millions of dollars in tax payments for the state, which is obviously a positive. However, since cannabis is still illegal on a federal scale, most banks refuse to do business with growers, manufacturers or retailers involved in the industry. As a result, most cannabis companies are forced to do business with cash.
Obviously, when you’re talking about a multi-billion dollar industry, moving around such an enormous amount of cash can prove to be quite difficult for most companies. However, California’s state treasurer has one possible solution for their “green” problem.
If There’s A Will, There’s A Way
No, this isn’t the premise of a mission from the video game series Grand Theft Auto. It is, however, one of the only conceivable ways to transport cash in the industry. Well, other than somehow convincing the government to legalize the plant on a federal scale, which would nip the problem in the bud, but we all know that’s not happening anytime soon.
So in response to the impending issue, state treasurer John Chiang formed a task group to conjure up possible solutions prior to legalization. In his report regarding the potential issues, armored cars were one of the main solutions brought to light, with Chiang citing state worker safety as a main area of focus.
“It is unfair and a public safety risk to require a legal industry to haul duffel bags of cash to pay taxes, employees and utility bills,” Chiang said. “[The] reliance on cash paints a target on the back of cannabis operators and makes them and the general public vulnerable to violence and organized crime.”
It should be noted that this wasn’t Chiang’s best course of action, but rather, the only viable one with legalization upcoming. He mentioned that, ideally, Washington should either, legalize pot federally, or at the very least, protect banks and financial institutions from possible prosecution if they decide to serve the cannabis industry.
However, with both of those options unlikely, armored cars seems like the only viable option, per Chiang’s report.
“Armored courier services would eliminate the need to directly handle large sums of cash at branch offices or open deposit accounts at financial institutions,” he noted.
Final Hit: California Wants To Use Armored Cars To Move Pot Tax Money
Chiang, who also toyed with the idea of state-run banks as a possible solution, believes the differentiating laws between California and the federal government could seriously impede the state’s legal weed industry.
“The clash between state and federal law threatens to cripple legal California cannabis businesses before they even get up and running,” Chiang said.”The inability of cannabis operations to get banking services means that many of them may remain in the underground economy and not become transparent, regulated, tax-paying businesses, as California voters intended.”
With legalization looming, California is going to have to settle on a solution, and fast. Otherwise, there could be an influx of crime worse than any trivial marijuana arrest has ever caused.
Looks like it might be time to break out the armored cars.