The Economist explains

Why marijuana retailers can’t use banks

Banks cannot handle dope money lest they fall foul of federal rules about money laundering

By B.S.

RECREATIONAL marijuana has been legally sold in California since the start of the year. The state treasury estimates that sales in 2018 will reach $7bn. But it will not collect its fair share, because pot taxes, it turns out, must be paid in cash. This makes tax collection “a nightmare”, as the treasury has described it. The predicament of Oregon, where recreational pot became legal in 2015, is a case in point. Sellers who declare sales have had to bring tax payments in cash every month to a guarded, bulletproof site in Salem, the state capital, no matter the distance they must travel. Operating only one such “cash-transaction unit” saves the revenue department money, but it also reduces the number of sellers who declare sales. So why can’t tax payments be made electronically?

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