Cannabis Business Can Find a Friend in the Form of Crypto
Hardly anybody in the market does not know about crypto and is away from its hype. Almost every sector is trying its hands on crypto technology. Cannabis market is not an exception to this either. It is one of the markets which believe that crypto would be better for it than the traditional banking system.
Considering this thought, the Assembly-member of California has introduced a bill in which it is recommended to deploy crypto-based payments for taxes of cannabis-related ventures. The bill says that California and city and county taxes if paid using crypto-based technology, would be safer. Assembly-member Phil Ting suggests this.
If this new bill gets converted into the law, cities, and counties under the jurisdiction would be given an option whether they want to choose the transactions in digital currencies from marijuana businesses, or want to stick to the traditional method. This bill, if approved would be implemented by 2020.
Many states in the US have legalized the use of cannabis for recreational purposes; California is one of these states. Apart from California Alaska, Colorado, Vermont, Massachusetts, Washington, and a few others also have legalized the recreational use of cannabis. However, even after the law has been passed, traditional banks do not wish to deal with local cannabis ventures. Most of the banks in the state are backed by FDIC, which prevents them from dealing with any activity which is not backed by federal law.
This is the reason why most of the pot stores/sellers cannot write checks and perform other basic financial operations. This forced them to deal in cash only; hence, most of the times, these business owners visit the tax offices with suitcases full of cash. The bill wants to ease this process and make business owners relieved.
Passing the bill would enable the cannabis-related companies to pay excise and taxes directly with stablecoins. Plus, the chances of theft gets reduced too. However, California is not the first state to implement this way of payment. The state of Ohio has already implemented it last year in November. The Ohio tax office accepts payment in cryptocurrencies like Bitcoin, but the money gets converted into the Fiat once it reaches the vault.