Cash-only marijuana dispensaries flood California tax office with paper

The businesses are legally unable to write checks or make credit card
transactions, raising questions of safety as people carry huge sums

Anita Chabria in Sacramento
Tuesday 16 February 2016 12.00 GMT

The Sacramento branch of the California tax collection agency reeks of marijuana.

That’s because it’s cash day at the collection center – when marijuana dispensary owners are allowed to bring in paper money to pay their quarterly sales tax bill – and the smell of their inventory clings to everything.

California, like all states with any form of legalized marijuana, faces a growing problem over the federal government’s position that cannabis remains a Schedule 1 illegal drug, classified the same way as meth or cocaine, with no legal uses – and therefore no legal access to traditional banks.

That means medical marijuana dispensaries, along with growers, distributors and other marijuana-related businesses that are operating legally under state laws, have no choice but to be cash-only businesses. They can’t write checks, deposit money in financial institutions or make credit card transactions.

“We’ve been a cash industry for ever and it has been quite a problem,” said Kimberly, the director of a non-profit dispensary in Sacramento who asked that her last name not be used for safety reasons. “We don’t want to drive around town paying our bills in cash. We want to be able to just go to the bank.”

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