The marijuana industry continues to fight legalization at every level there is to fight. At first, it was the laws, then when those started to change, we saw the DEA step in to throw their abuse of power around, when the government said enough of that it's up to each state, then the banks jumped in along with big pharma. Each division's primary purpose is to slow the roll of legal marijuana while they try to figure out how to get a piece of the cake without risking anything.
So why is it that the banks do not let legal marijuana business who are following the state guidelines use their banks? The simple, easy answer is because it is not legal on the Federal level, or at least this is what they want you to think. For many it is a very logical and reasonable explanation, but it is not the truth.
Major banks like HSBC get away with taking drug money each and every day. They even openly admitted to laundering billions of dollars from Mexican and Columbian drug cartels along with others and violating a slew of other banking laws. Despite the admission of guilt Assistant Attorney General Lanny Breuer signed off on a settlement deal with the bank that gave them a slap on the wrist for taking the cartels money.
Officials have even gone one step further to say that if they were to prosecute HSBC, they fear that it could cause a financial collapse around the world. When it is put this way to the people who have their money at these banks, of course, they do not want to see anything happen; they do not want to lose their hard earned money. The truth though is that this is just another scare tactic as the cartels bring in more money than the current legal marijuana industries due.
Now if fighting with profits of cartels was not enough, we still have the issue of the Federal laws that the IRS enforces which is U.S. tax code section 280E. What this means is that a marijuana-based business cannot write off business expense or use ordinary deductions. In turn, this makes it so they have to pay taxes on 100% of the gross profits, not the net profits. This makes the tax bills extremely high for the marijuana-based business and can cause some to shut their doors if they do not get creative with their funds.
They are stuck in a catch 22 world right now, one that if they claim all they make, the tax bill is next to impossible to pay before the IRS comes after you. On the other hand, they cannot claim everything, risk getting caught, fined and go to jail or even just be put in prison for the marijuana-based business itself if they cannot find the proof.
Another issue the cannabis industry faces is funding, most banks that do let them deposit money, will not lend them any money or borrow it at a largely inflated rate in fear that they will not get their money if the business were to close or the laws were to flip back.
Until the banks stop helping cartels and the federal government stands in the way, we will see banking for marijuana businesses stay at a halt. Stuck in a game of cat and mouse, until either the laws change or someone takes a stand and gets creative with banking for marijuana businesses.