Although cannabis is still illegal under federal law, cannabis businesses in Alaska are still required to pay state taxes. With no access to banking services, tax payments need to be made in cash. But that has become even more tricky in Alaska.

James Barrett, an owner of Rainforest Farms, a legal marijuana cultivator and retailer in Juneau, attempted to pay his taxes via mail at a post office, just as he had the previous month. This time, he was denied.

“Any proceeds from the selling of (marijuana) is considered drug proceeds under federal law, so you can’t mail that,”

said Postal inspector Aaron Behne.

This was news to Ken Alper, Alaska Department of Revenue Tax Division’s Director, who was under the impression that the state had an established mechanism for collecting taxes from cannabis businesses, “We thought we had done that and this throws a tremendous wrinkle into our processes,” he said.

Marijuana businesses owners are forced to conduct much of their transactions in cash due to federal law. Without the digital footprints and automatic payments that banks facilitate, cannabis businesses must laboriously keep track of cash. Barrett estimates that he spends one day per week dealing with cash by hand-delivering payments, counting currency, and entering transactions into a database.

“It’s difficult. People like cash, but it does take a lot to move it, especially when you have to account for it properly,” Barrett said.

Kevin Anselm, Alaska’s banking regulator, mentioned that while cannabis businesses are currently allowed to operate in their own state, federally-regulated banks still face strict consequences. He stated,

“Until there is an act through Congress, I understand why the banks are very concerned. Just because the law is not being enforced today does not mean it won’t be enforced tomorrow.”

There is also a safety risk at play. The amount of cash businesses like Rainforest Farms handle means they are a target for crime. Alaska state law requires cannabis business owners to properly protect their cash and inventory, but other states with similar regulations have still experienced fatal consequences.

Cary Carrigan, executive director of the Alaska Marijuana Industry Association (AMIA), posed the question,

“Does somebody need to get shot or robbed or killed for somebody to pay attention to this issue?”

Fortunately, lawmakers are attempting to make the marijuana industry safer through banking. Representative Don Young, R-Alaska, along with a group known as the Cannabis Caucus, announced the SAFE Banking Act, legislation that, “ensures institutions can service marijuana-related businesses without the fear of reprisal from the federal government,” according to Matt Shuckerow, a spokesperson for Young.

Until this kind of legislation passes, the Alaska marijuana industry must continue to use cash, or use tactics that hide the nature of their businesses to their banks. Lacy Wilcox, president of the Southeast Chapter of AMIA, thinks the marijuana industry in her state will eventually streamline financial transactions.

“We’re all rooting for each other, and I think collectively we’ll get there,” said Wilcox. “The only question is, how long is it going to take?”

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