Queency Jain
Marijuana, though sold legally in 36 states of US and the District Columbia for medical use and recreational purposes, is still and illegal business under federal state and banks don’t service the industry.
With the Covid 19 outbreak and surge in use of marijuana, the US Marijuana business has started facing cash flow problems thereby not able to fulfill the basic business transactions like paying its employees.
According to the data from Euromonitor, the sales of marijuana grew by 30% last year and are expected to grow more than 20% by this year.
While the big firms can manage to transport the money through heavily armed guards, the small operators have to depend on themselves.
The amount of risk of being robbed or the money being confiscated by airport security is much higher but the weed producers still have to take risk to travel on their own taking such risk.
Legalization of marijuana is important to be looked at and thus New york and New Mexico are looking forward to make it legal for recreational purposes so as to make the sector easier to access banking services.
The House of Representatives have earlier passed the bill to make use of marijuana legal but the bill could not make to the Senate.
According to the data of the government, only 515 of the more than 8,200 federally registered banks and one in 30 credit unions in the United States worked with marijuana businesses at the end of 2020.
The service, if given, often comes with high premium because of federal illegality involved with more paper work by banks.
Within the industry, even the marijuana executives struggle to get loan and advances from the banks thereby struggling even to retain their personal accounts.