The cash that Reno cannabis businesses bring to City Hall to pay their taxes weighs more than some of the employees in charge of collecting it.
The city schedules a special tax day for four dispensaries to pay tens of thousands of dollars each quarter. It’s a “Hollywood movie amount of money,” if not exactly in uniform denominations wrapped in crisp bundles as you’d see in a film, said Dylan Shaver, director of Reno’s Office of Policy and Strategy. Staff have to count wads of cash in a guarded room while the taxpayer waits. An armored truck takes it for deposit.
“That’s an incredibly resource-intense way to collect taxes from four entities,” Shaver said.
Banks have been reluctant to touch cannabis businesses because the substance is still illegal under federal law. That’s quickly morphing into a huge monetary problem as 11 states have legalized the sale of recreational marijuana and nearly two dozen more allow only medical marijuana.
States with marijuana dispensaries flush with cash are exploring banking workarounds using credit unions, digital currencies, and payment apps. Nevada, for one, aims to retool the idea of a casino chip to let cannabis companies pay their taxes and other bills.
State officials say they’re stepping in to address public safety and compliance issues that the cash creates in the absence of federal action. Recreational excise and sales tax revenue could reach $1.6 billion this year, according to an analysis by the Institute on Taxation and Economic Policy on seven states where taxable sales have started.
“As retail gets bigger, the problem only gets harder,” Shaver said.
Digital Currency Targeted
Nevada is developing a digital currency system to offer “a much cleaner way” to pay taxes on cannabis sales while addressing the risks of cash, State Treasurer