October 21, 2015
Native American Tribes May Hold Answer to Cannabis Banking?

Native American Tribes May Hold Answer to Cannabis Banking?

Cannabis banking has been an issue since medical marijuana was first made legal in 1996 in California. Since then, marijuana has become a billion dollar industry across the states, but the money still has no place to go. Robberies are becoming more and more common with the accumulating cash. Dispensaries all over the country have had to increase security, and build massive vaults. The cannabis market is growing with each election, but the risks will also rise as long as there is no place for the cash to go. The California CannaNative organization may have the answer.

CannaNative founder, Anthony Rivera, is calling Native American tribes to action. The casino industry already has its own banking regulations established, and the U.S. government has already given permission for reservations to legalize marijuana. There are more than 506 sovereign Native American nations in the U.S. Rivera is hoping many tribes will come on board with the idea, because it can’t be done by just one reservation.

How it would work.

The entire idea revolves around the fact that armored vehicles would have to safely pick up thousands (if not millions) of dollars in one state and transport it to the nearest native nation. The money would then be put into a system allowing for electronic banking. Dispensaries would finally be able to pay employees via direct deposit, and not have to worry about stashing such a massive amount of cash.

The safety of the marijuana money decreases with each mile, so it comes down to how far those armored vehicles would have to travel. If a majority of tribal reservations were on board there would be a banking situation available in most states that have legalized.

Dealing with the FDIC

The entire banking problem stems from federal regulations and the FDIC (Federal Deposit Insurance Corporation). Cannabis is still illegal on a federal level, which means any accredited bank can’t accept any income from the sale of an illegal substance. Some dispensaries in Colorado have been able to get away from this by also selling clothing and accessories, but those businesses were quickly and swiftly dealt with.

Paying taxes has been a big problem also. Cannabis dispensaries have to pay taxes in cash, which normally isn’t an issue, but state departments didn’t want to accept cash that smelled like marijuana. Security measures often lead to cannabis products being stored with money collected from sales, which leads to the aroma sticking to the bills.

There are constant hurdles for cannabis companies to jump over, but stashing the cash is by far the highest.  As long as marijuana is federally illegal in America banking will be an issue, but, for now, Native American tribes could hold the answer.