One Year Later: Nevada's pot industry still faces a banking barrier
LAS VEGAS (KSNV) —
It is Monday morning and there is steady traffic at Las Vegas Releaf Dispensary. It is where News 3 meets customer Brannon Kingston, in town with his fiancee to get married.
“A couple vape cartridges and a pre-roll joint. I spent about $140,” he says, looking over his purchases.
Take Kingston and multiply. In the 10 months of this fiscal year, which started last July, the state says people like Kingston have bought $434 million of medical and recreational pot.
If you are a dispensary, there is a not-so-small problem. None of that money goes to a bank because marijuana is still illegal under federal law. Financial institutions will not touch the money that dispensaries make.
“I would say that not being able to do banking is probably the one biggest inefficiency in the way we do business,” says Lissa Lawatsch, Las Vegas Releaf’s general manager.
She says the banking barrier means all their sales are in cash, and all their payments are in cash to workers, landlords and vendors, which can be a problem.
“I have had people straight out tell me that they cannot take cash as a form of payment,” she told News 3. On top of that, being barred from banking makes simply running the business difficult.
“We cannot go out and get traditional credit like any other type of small business can,” she says.
So how does it work? Much of their marijuana money gets paid out. What is left over, they have to figure out ways to store it. Think about that: Your average dispensary takes in between $10-50,000 a day. That's a lot of cash, which is potentially a target.
On Capitol Hill, there are efforts that would let dispensaries use banks.
“This brings safety and security to these businesses and people who are vendors and contractors who work with them,” says U.S. Sen. Catherine Cortez Masto, D-Nevada, one of a bipartisan group of lawmakers backing the “States Act,” which would allow states to determine for themselves the best approach to marijuana within their borders.
The bill, among other things, would allow access to the banking system.
Another measure, the “Secure and Fair Enforcement Banking Act”, is sitting in the U.S. House and has Representative Dina Titus, D-Nevada, as an original co-sponsor.
Nevada legalized pot because of the tax money it would bring in, and the state Department of Taxation reports in the 10 months since the beginning of this fiscal year in July, tax revenues totaled $55.53 million. Nevada’s overall tax take is bigger when you add in local taxes, sales taxes and fees.
“A year later, we have raised $120 million in total taxes when you include state and local governments,” says State Sen. Tick Segerblom, who is considered the godfather of Nevada’s legal marijuana industry, having written legislation that made marijuana’s entry possible.
Segerblom says marijuana has been a good investment for the state of Nevada.
“When you figure that with Tesla we gave them a billion-and-a-half (in incentives), with the stadium we gave them $750 million (in a public contribution), this is an industry we did not give them anything and they are producing $120 million in taxes, 5,000 employees,” Segerblom says.
Nevada legalized pot because much of the tax money is supposed to go to schools.
Last session, lawmakers tweaked that, sending some to the state's "rainy day fund,” which is Nevada’s savings account. Lawmakers say they did that because they wanted to see how reliable marijuana sales would be.
Segerblom, who is running for a seat on the Clark County Commission, hopes next session more pot money stays for schools.
“I think that should go to the county of origin. A lot of counties don't even allow marijuana, so why should they get our marijuana money?” Segerblom asks.
That is a debate for next year, over an industry awash in cash.