The marijuana industry gets a lot of headlines because of the large dollar figures involved. This year Colorado alone is on its way to selling more than one billion (with a B!) dollars worth of marijuana. Marijuana sales figures are climbing in Washington, and with the exception of the recent slowdown in Oregon due to marijuana testing issues, Oregon’s sales have grown steadily too. Alaska just started marijuana sales, and eventually the ‘2016 class’ of legalization states will start sales.
The state with the largest industry is going to be California, and it’s not even close. California is estimated to be the future home of half of all marijuana sales in America. Estimates put California’s marijuana industry at 6 billion dollars a year after adult-use sales come on board. If the banking rules stay the same as they are right now, that’s going to be a 6 billion dollar industry that is completely cash based. That’s a problem in many ways.
Six billion dollars in cash creates a tremendous public safety issue, as it’s a magnet for criminals. It also creates logistical issues for marijuana companies who have to resort to storing their cash in safes. It also creates a burden for consumers who have to go to ATMs prior to visiting most outlets, or incurring fees if using a card on site. Because of California’s new recreational marijuana law coming on line in the near future, and because of the large amounts of cash already being thrown around in California’s established medical marijuana industry, California’s Treasurer asked the incoming Trump administration for guidance on marijuana banking. Per the Los Angeles Times:
Just weeks after Californians voted to legalize recreational use of marijuana, State Treasurer John Chiang on Friday appointed a working group to figure out how to address problems caused by the unwillingness of federally regulated banks to handle money from pot businesses.
Chiang also sent a letter to President-elect Donald Trump and members of California’s congressional delegation seeking guidance in finding a solution.
“This conflict between federal and state rules creates a number of problems for the states that have legalized cannabis use, including difficulties collecting tax revenue, increased risk of serious crime, and the inability of a newly legal industry under state law to effectively engage in banking and commerce,” Chiang wrote to Trump and those he asked to serve on the working group.
The marijuana industry will always be limited as long as it doesn’t have equal access to America’s banking system as other industries do. The marijuana industry is not going away, and is going to continue to grow. The dollar figures involved will also continue to grow as current states increase in size, as new industries come on line from the last election, and as more states reform their marijuana laws in the future. The Obama administration did next to nothing to help resolve the marijuana banking issue. I’m curious to see what the Trump administration does, if anything at all.