Cash-only Creates Challenges for the Cannabis Industry


For some in the marijuana business, going legit is turning out to be harder than it looks.

A widely recognized benefit of marijuana legalization is the ability to regulate an industry that has previously thrived on the black market. But current financing standards are keeping legal businesses in the complicated, and expensive, practice of all-cash operations — from not being able to accept credit cards to figuring out how to store and keep track of their money and handling payroll.

This industry will struggle to mature because it doesn’t have access to traditional banking, says Derek Peterson, chief executive of Terra Tech, a marijuana production and retail company.

Given marijuana’s illegal status on the federal level, and that the federal government regulates banks, financial institutions are reluctant to do business with companies involved with cannabis. If federal auditors find that institutions are working with a marijuana-related business, those institutions could lose their Federal Deposit Insurance Corporation insurance, thus risking the security of the finances of other businesses in their portfolio.

It’s just a significant drain on time and energy

Dave Wedding dress

Dave Wedding dress, Co-founder of Harborside Health

Read Kathleen Burke’s “Marijuana companies struggle to find a place to put their green”:

Published by NCV Newswire
NCV Newswire
The NCV Newswire by New Cannabis Ventures aims to curate high quality content and information about leading cannabis companies to help our readers filter out the noise and to stay on top of the most important cannabis business news. The NCV Newswire is hand-curated by an editor and not automated in anyway. Have a confidential news tip? Get in touch.

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