The Internal Revenue Service (IRS) is paying $1.7 million to a Virginia company to handle “large cash payments for processing cannabis federal taxes.”
According to Quartz, the U.S. government collected approximately $4.7 billion in taxes last year on nearly $13 billion in revenue from legal cannabis companies. Most of these companies were forced to pay their federal taxes in cash because about 70 percent of all legal cannabis businesses are unbanked.
It’s important to note that the cannabis market’s struggles to access banking services are not limited to small dispensary storefronts, though they are undoubtedly affected by such legal hurdles. The legal marijuana industry in North America includes a complex ecosystem of cultivators, logistics providers, lawyers, accountants, contractors and more — meaning an entire supply chain of B2B service providers is impacted when a legal marijuana company is unable to get banked.
While the government has regulations for banks to provide services to cannabis companies, “99 percent of banks…