The cash-heavy pot industry could get a makeover in the state of Nevada. The state authorities are now allowing the testing of a limited marijuana banking system. The new state law will help in bringing an alternative payments system for the booming pot industry is forced to deal in cash.
What is the government planning?
A new measure which came into force after being signed by Democratic Gov. Steve Sisolak allows the state treasurer’s office to create a three-year pilot program. It is focused on the growing cannabis business in the state and aims to bring limited marijuana banking. State Treasurer Zach Conine was the prominent backer of the program. He said that the system will help in removing large amounts of cash that is used by the cannabis industry in Nevada.
His plan includes the creation of an online system where people could receive and send digital currency. He compared the new system with digital wallet apps or gift cards. However, the program will not include a broader range of banking services like loans. Conine believes that the new system will be an innovative solution to a real problem.
Why does the cannabis industry need banking?
While several states are opening up to the possibility of cannabis, the industry still has to depend largely on cash. Most banks don’t prefer to do business with the industry because the US government still considers cannabis illegal. Despite the challenges, attorneys general from 33 states urged the Congress last month to open the US banking system to the legal marijuana sector. The states will have to depend on their own laws until the Fed decides.
Hawaii, for instance, has a cashless, debit payment app used for the sale of medical marijuana. Similar systems are available in other states as well. Neighboring state, California, which the largest legal cannabis market in the country, is also looking forward to creating a special class of banks that could cater to the marijuana industry.
Nevada plans to make its pilot system voluntary. Businesses with the marijuana industry as well as landlords, garden supply companies and payroll firms that deal with cannabis businesses can be recruited in the system. Conine hopes for the system to start running by July 1, 2020, and will be helpful for companies who have to pay employee salaries and state taxes in cash. As dependency on cash reduces, these companies, vendors, and dispensaries will find newer opportunities for growth.