Pot Shops Can’t Take American Express or Deposit in Banks

Every month, Elliott Klug or one of his business partners walks into the Colorado Revenue Department with a messenger bag holding thousands of dollars in cash, and watches as state employees start counting.

Klug, co-founder of PinkHouse Blooms LLC, a chain of five medical-marijuana dispensaries in Denver, has to pay his sales taxes in cash because federal law bars banks from offering accounts to pot shops, even as Colorado allows and taxes them.

“It highlights the awkward situation we’ve been placed in,” Klug, 36, said. “We are paying taxes, but despite our best efforts to be good citizens, we’re still paying in cash.”

Colorado is among 18 states that allow the medical use of marijuana, and 11 that permit sales through dispensaries like Klug’s. But federal law labels the drug a controlled substance and requires banks to report related transactions as suspicious activity. The inconsistency creates a grey area for dispensary operators, who have to choose between operating as a cash-only business, susceptible to robbery, or finding creative ways to open checking accounts and accept credit and debit cards.

– Read the entire article at Bloomberg News.



  1. Mrs. RatsRectum on

    Since I’m brainstorming and just tossing things out there, you have experience of working on the inside in the IRS, so what’s your solution to amending the tax code to get the IRS off the banks of financial institutions, couriers, insurance companies and everybody else a regular business is allowed to do business with that a cannabis enterprise also needs to do business with. The Koch brothers are libertarian oriented, and have no problem with legal weed. Even e-transactions leave a trail. Then put in the tax code the restrictions or the specifics the keep the IRS off the backs of banks. I mean you tax folks tried this shit in The Netherlands, too. If you’re so against the Koch brothers why don’t you see if you can get O’Bummer to call off the 280E dawgz. It’s easy to be against something, so where are your ideas to contribute to the legalization? Another article here suggests it is possible, but suggests it would be easier to make an exemption for cannabis enterprises. Unfortunately, anything for marijuana goes nowhere at the federal level, so marijuana and cannabis can not be in the language in the alteration, which is why the language would have to be so broadly written. If the Koch brothers get a tax break, then so be it. It serves the feds right for being such bastards all this time.

    So, if you’re a prohibitionist…and the horse you rode in on.

  2. animan425 on

    Of course, the real reason why they won’t let Cannabis shops have bank accounts is because the DEA feds and police who help them raid shops wouldn’t be able to steal it all themselves, which is exactly what they are doing.

    DEA Raids on cannabis shops are some of the easiest money the feds and cops have ever stolen. They don’t want to lose that.

  3. Anonymous on

    Cannabis an all cash business, well lets just honestly say sort of, like, mostly cash. Interac- e-transfer, for example, could never be used in this type of business…OK I’ll move on, as an IRS agent I nearly fell over at the suggestion that companies that do business with non profits should somehow be classified to ‘ keep the IRS off the (ir) backs” Good lord the Koch brothers would start connecting the oil companies into the hash oil business if it meant a saved buck! Sorry but tax code can’t favor cannabusiness any more than any other…..in fact ignoring it (like now) is really in every business man’s interest and the gardeners of the world know it~

  4. Mrs. RatsRectum on

    You’ll have to form a private collective, a private business society with a big-ass safe to store the money. It will have to have security like a bank and manage accounts of its members.

    Cannabis will remain an all-cash business.

    Keep only your working capital in the collective’s safe. Make sure you store the collective’s cash reserves of money not needed for quarterly business and tax expenses in a different safe in a different secure location, and make sure the individual members have their own cash reserves and their own working funds for expenses in a different safe. Something along those lines. If the feds want to do what they do best, namely go for the cash grab, then they’ll have to know where all the money is and do multiple robberies, oops, I mean raids.

    If the U.S. tax laws can be re-written or modifies in some way to put in language that not only keeps the IRS off the backs of the 501c groups–tea party or non profit cannabis clubs such as in California–then the next logical step is to put make it so that this law also keeps the IRS off the backs of companies that do business with these non profits. The language should give legal cover to the cannabis community so that courts strike down cases of the IRS going after the cannabis community and their banks.

    All this in the momentum of the public outrage, quickly.

    Then the feds don’t have the IRS to use to club us to death.

  5. jammerk65 on

    open an account with a credit union, they should be happy to take your money….

  6. Anonymous on

    The mega banks seem to have had no problem parking cartel cash over the years, propped up may of them in the Fall of 2008 to avoid a world-wide economic collapse. Guess they don’t want to mess with the chicken feed?

  7. Anonymous on

    buy gold and silver coins also with bitcoins

  8. Anonymous on

    Much better, so all the corrupt bankers don’t get their hands on that money. Without an intermediate financial institution, which is like a leech, everybody wins. Better to use Bitcoin, a decentralized digital currency in which no central authority issues new money or tracks transactions.