US cannabis sellers stash cash as banks refuse to helpPosted by On


The US cannabis business has a very particular cashflow problem – too much of it.

Cannabis can be sold legally in 36 US states and the District of Columbia (D.C.) for medical use and in 15 of them and in D.C. for recreational purposes. But it’s still illegal on a federal level, meaning most banks won’t service the industry in case they fall afoul of money laundering laws.

With the Covid-19 pandemic and increasing legalisation driving a surge in cannabis use, the sector’s producers, manufacturers and retailers are awash in cash, adding risk and costs to the most basic business transactions from paying employees and filing taxes to finding somewhere to store their income.

“All this cash flowing around is just a recipe for disaster,” said Smoke Wallin, chief executive of hemp health products maker Vertical Wellness Inc. “How do you account for it? Where do you keep it? How do you move it? Even in a safe, it’s a security risk for employees.”

Ryan Hale, a US Navy veteran and co-founder of cash management firm Operational Security Solutions, had to persuade a weed farmer in California to stop hiding cash in a tree. On another occasion, Mr Hale had to help a bewildered cannabis retailer who had lost count of the dollar bills overflowing from his store’s lockers.

Legal US cannabis sales grew 30 per cent to $22 billion (£16 billion) last year, more than the $17.5 billion (£12 billion) Americans spent on wine, according to data from Euromonitor. Sales are expected to…

Original Author Link click here to read complete story..

The US cannabis business has a very particular cashflow problem – too much of it.

Cannabis can be sold legally in 36 US states and the District of Columbia (D.C.) for medical use and in 15 of them and in D.C. for recreational purposes. But it’s still illegal on a federal level, meaning most banks won’t service the industry in case they fall afoul of money laundering laws.

With the Covid-19 pandemic and increasing legalisation driving a surge in cannabis use, the sector’s producers, manufacturers and retailers are awash in cash, adding risk and costs to the most basic business transactions from paying employees and filing taxes to finding somewhere to store their income.

“All this cash flowing around is just a recipe for disaster,” said Smoke Wallin, chief executive of hemp health products maker Vertical Wellness Inc. “How do you account for it? Where do you keep it? How do you move it? Even in a safe, it’s a security risk for employees.”

Ryan Hale, a US Navy veteran and co-founder of cash management firm Operational Security Solutions, had to persuade a weed farmer in California to stop hiding cash in a tree. On another occasion, Mr Hale had to help a bewildered cannabis retailer who had lost count of the dollar bills overflowing from his store’s lockers.

Legal US cannabis sales grew 30 per cent to $22 billion (£16 billion) last year, more than the $17.5 billion (£12 billion) Americans spent on wine, according to data from Euromonitor. Sales are expected to…



Source link

News

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.