Gordon JamesJanet Yellen, the Chair of the Federal Reserve has said that if cannabis companies are allowed to bank with federally regulated institutions it would help relieve some burden on the IRS.
Janet Yellen, the chair of the United States Federal Reserve, has said that cannabis companies are banking billions and it would help the IRS. Read more in detail here: cbd stocks to watch.
On Wednesday, Colorado Congressman Ed Perlmutter of the House Financial Services Committee asked Treasury Secretary Janet Yellen whether she felt that allowing cannabis firms access to US banks would help the IRS collect taxes, and she said, “Of course.”
The IRS, no doubt, would love to have the cannabis industry’s multibillion-dollar cash flowing into its coffers. Banks in the United States would undoubtedly be thrilled to participate as well.
The Banking Act’s Contribution
At least from the perspective of the banks, who are pressing politicians to adopt the Secure and Fair Enforcement (SAFE) Banking Act, which is designed to give safeguards and allow financial institutions that provide banking services to lawful cannabis-related enterprises.
The American Bankers Association, the Union National Association, and the United Food and Commercial Workers Union (UFCW) recently signed a letter to Senate leadership pleading with them to enable legal cannabis firms access to banking services. The goal, according to the organization, is to approve marijuana banking reform as part of the National Defense Authorization Act this year (NDAA).
Marijuana is still illegal on the federal level, despite the fact that it is legal to some extent in 47 states and Washington, D.C. Financial institutions that take weed-earned currency risk federal fines in jurisdictions where cannabis is completely legal, forcing cannabis farmers, distributors, and merchants to conduct their transactions in cash.
“Make it all cash if you truly want to build an industry based on gangs and cartels.” Sen. John Hickenlooper (D-Colo.), speaking at The Hill’s Regulating Cannabis event, stated, “It’s almost like the system that we have today is geared toward supporting things that we don’t want.”
“If you de-schedule it, banks will be able to bank it, and it will no longer be a cash business.” There are a slew of disadvantages to running a cash-only firm. One is that firms themselves are unable to get financing.” According to Hickenlooper, who spoke to The Hill.
There is some bipartisan support.
Rep. Nancy Mace (R-SC), who voted for the SAFE Banking Act and is one of the few Republicans in Congress who supports marijuana decriminalization, proposed legislation to legalize and tax marijuana on a federal level in mid-November.
“Cannabis isn’t very contentious, except in Washington, where certain members are terrified of it or hesitant to touch it.” “It shouldn’t be like this,” Mace opined.
“We’re subsidizing the cartels by having all cash companies,” Mace said, echoing Hickenlooper’s assertion. “It’s a risky situation.”
Meanwhile, the Internal Revenue Service seems to be salivating.
In October, the IRS offered cannabis entrepreneurs some helpful advice in the form of a conference hosted by the National Association of Tax Professionals, in which they learned that all money, regardless of source, is taxed. Last year, the IRS launched a new website to tax state-licensed cannabis businesses.
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Gordon James