Cash Only: Legal Marijuana Companies Must Use Thick Stacks of Bills to Pay Taxman

By:
Chris Gaetano
Published Date:
Apr 18, 2017
Wads of Cash

While marijuana is legal in several states, the federal government still recognizes it as an illicit substance. This isn't to say, though, that it doesn't want a cut of the industry's profits. The problem, according to CNBC, is that drug laws require that these taxes be paid entirely in cash, which can create a number of logistical problems all for the sake of paying taxes, something most people don't want to do anyway. 

For instance, Harborside Health, an Oakland-based medical marijuana company, brought in $44 million in revenues in 2016, which means it owes lots of state, federal and local taxes. Rather than writing a check like most other businesses, it instead has to count and hand-deliver millions of dollars worth of physical cash. $1 million in hundred dollar bills weighs about 22 pounds and have a volume of about 11 quarts. Needless to say, counting and transporting these bills is not a casual affair, particularly given the additional threat of theft that such a huge pile of cash could bring. Some companies have even resorted to hiring armored cars with armed guards to transport their cash, adding even more expense to the whole affair. 

This isn't just a headache for companies: tax authorities need to count that cash to make sure it's all there, which presents its own sort of logistical problems on the administrative end, especially when considering that a single collection point could see hundreds of millions of dollars in cash from various businesses. And, like the businesses themselves, all this cash means that tax authorities, too, must have armed guards to collect it. 

Click here to see more of the latest news from the NYSSCPA.