Financial & Banking

Cannainsurance, Cannataxes, Cannit be legalized already?

Dianelle Bresler
Written by Dianelle Bresler

How do dispensary employees handle their taxes when the income is coming from the sale of cannabis?

This question boggles the minds of many who want to partake in the green rush. The idea of having your business shut down or losing your job unexpectedly by the DEA sounds unappetizing. Fortunately, income tax from dispensary employees is not an issue. They are granted the same benefits as the business next door.

How They Tax It

Dispensary employees simply report to the IRS they work for a retail shop. When it comes to their taxes, the IRS just wants to know the amount received, not what is being sold. Even if employees are paid in cash, they just care how much, not how.

From the Source

I went to investigate if this was true, and low and behold, it’s even better than I imagined.Kimberly, a bud tender from Springfield, Oregon, told me in an interview about her experience working in the cannabis industry.

“I love my job and the people I get to work with” Kimberly said, “I get paid every two weeks, receive great insurance, and pay all my taxes!”

She told me the employees can choose from either direct deposit or checks, and receive bonuses. She confidently assured me the dispensary pays all of its taxes, and excitedly told me about their cannaparties. Sounds like a better time than a corporate Christmas dinner to me.

Legalize it Already

To continue saying cannabis is federally considered a Schedule One drug sounds ludicrous to everyone reading this. We’re all anxiously waiting for cannabis to be removed from the outrageous classification and legalized. Unfortunately, last month, “the California State Assembly effectively killed a bill that would have paved the way for state-chartered banks to handle finances.”

Although there are federal obstacles in the way, the Treasury Department’s Financial Crimes Enforcement Network reported an increase of banks opening up cannabis related accounts (3).

A data analytics firm known as New Frontier Data, released a new study saying that if cannabis would be legalized today, there would be 782,00 additional jobs nationwide, jumping to 1.1 million by 2025 (4). Giadha Aguirre De Carcer, the CEO of New Frontier said, “If cannabis businesses were legalized tomorrow and taxed as normal businesses with a standard 35 percent tax rate, cannabis businesses would infuse the U.S. economy with an additional $12.6 billion this year,”.

Now that banks are allowing cannabis businesses to open up accounts despite the federal status, more cannabis industry employers, like Kimberly, can legally obtain payment and benefits from their employer. It’s only a matter of time until some sort of legalization occurs. For now, we will just have to continue shoving statistic in the governments face of how massively the economy can grow if only they legalize it. If that doesn’t work, just remember that baby boomers will not hold power forever.

Sources:

  1. Angell, T. (2018, June 14). More Banks Working With Marijuana Businesses, Despite Federal Moves. Retrieved from https://www.forbes.com/sites/tomangell/2018/06/14/more-banks-working-with-marijuana-businesses-despite-federal-moves/#6b60e60f1b1b
  2. Kovacevich, N. (2018, August 21). California Kills A Cannabis Banking Plan. Retrieved from https://www.forbes.com/sites/nickkovacevich/2018/08/21/california-kills-a-cannabis-banking-plan/#5605243910a6
  3. United States, Treasury Department, Financial Crimes Enforcement Network. (2018, March 31). Marijuana Banking Update. Retrieved August/September, 2018, from https://www.fincen.gov/sites/default/files/shared/Marijuna_Banking_Update_Through_Q1_2017.pdf
  4. Zezima, K. (2018, January 10). Study: Legal marijuana could generate more than $132 billion in federal tax revenue and 1 million jobs. Retrieved from https://www.washingtonpost.com/national/2018/01/10/study-legal-marijuana-could-generate-more-than-132-billion-in-federal-tax-revenue-and-1-million-jobs/?noredirect=on&utm_term=.70c6b702d1ff

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Dianelle Bresler

Dianelle Bresler

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