The dangers of running a multi-million dollar cash business

Cannabis companies struggle to obtain and maintain banking services while facing the dangers of having significant cash on hand.

Due to the status of cannabis as an illicit substance in the United States, many banks do not want to run the risk of accepting dollars from the weed and facing extreme penalties or even shutdown.

And while some businesses do eventually find banking services, many cannabis business owners face huge amounts of hard cash every day. This is not only very inconvenient for anyone trying to maintain a legitimate business, but it also puts the lives of cannabis business owners in extreme danger, highlighting one of the many major issues with the federal cannabis ban. .

Congress introduced the SAFE Banking Act of 2021 to create secure access to banking services for cannabis companies. There is language in the bill that prohibits the federal government from penalizing banks that take money from cannabis companies. It would also allow banks to extend loans to cannabis companies.

But as lawmakers like Sen. Cory Booker fight to ensure the banking bill properly addresses social equity before it passes, the hyper-local dangers of running a cannabis business in cash remain.

The cost of banking in cannabis

Top down view on a single cash drawer filled with

To gain insight into the logistics and dangers of running a multi-million dollar cash business, Leafly spoke with Charles Ball, president and chief financial officer of Ball Family Farms in California.

People like Charles have to keep hundreds of thousands of dollars in cash, along with buckets of change, with them so they can keep track of every penny that goes in and out of the business.


How much does it cost to start a cannabis business?

“Imagine you have to do everything in your life with cash, and that’s it. You don’t have a debit card; you don’t have a checkbook; you can’t do anything online, just make money. A contractor arrives, an electrician does $ 60,000 worth of work. You must have $ 60,000 of cash with you. It’s intimidating, and you have to have systems on systems on systems, ”says Charles.

The taxman comes

Once the operational costs are paid, there are taxes. The IRS only accepts cash under very limited conditions, and you don’t have a bank account, so you can’t issue a check. Then how to do do you pay taxes as a cannabis business?

“You have federal and state taxes and insurance policies [to pay.] They don’t take cash. If you go into the federal system and try to pay your employees’ federal taxes in cash, they’ll say no. You can send two payments per month, and it must be less than $ 2,000. If you do any type of payroll, taxes easily go up to $ 10,000 and up. The only other option is to put it in another account, but that’s money laundering, ”says Ball.

To pay their taxes, Ball Family Farms was only allowed to send $ 4,000 in monthly payments to the government. This put them in a position where they had a rolling balance on taxes owed, which comes with extreme penalties. The company is currently negotiating the payment of fees with the IRS, which equals the total tax payable plus 25% (!!!).

Charles recounts a time when he attended a Los Angeles City Council meeting on taxes.

“I asked them, ‘If we pay you cash, where do you put your money? You don’t just put it under a mattress. Their answer was “next question”. I even offered, “I know you have a bank account, so can you just ask this bank to help us?” They’re like, ‘Next question.’

Imagine having millions of dollars stashed in the city being your way of life. Stress, anxiety, everyday fear. To know that at any moment you are one theft away from seeing your business ruined, or one kidnapping from a tragedy, or one bullet away from no longer being on this earth because you cultivate weed for a quarry?

It’s terrifying, and it’s real life for a lot of people behind the businesses where you buy weed and even the stores where you buy weed.

“My biggest fear would have been if people thought the money was in my house. This is where my kids live, but I’ve never had any problems, thank goodness.


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Protect a growing treasury business

To protect their assets before resorting to the bank, Ball Family Farms used shelters across town. They had three or four at one point. The only people who knew where they were were Charles and the CEO of the brand, Chris. They sometimes even hid locations from each other, leaving no one with the location of all the money.

But that was just one of many security systems Ball had put in place over the past four years before finally finding a bank in 2021.

Charles explains: “We had several shelters. We would never put all the money in one place. We made sure it was highly secure. Most people understand that cannabis is about money, so some of the precautions I would personally use: never drive home straight from work; never carry too much cash; make sure I take specific routes to each different safe house etc.

How banking services help cannabis business owners

After four years of going door to door with different banks asking for help, Ball Family Farms finally managed to get a bank account. But Charles says it took a little help from one of their partners.

“I got in touch with this person and he said to me, ‘If you have all your papers and you can show the bank that you are legitimate and that you follow everything you do, you might have an option . ‘When we returned it, they were like,’ Oh, you’re doing everything by the rules. »As our practices were already oriented towards legitimation, this enabled us to [get the bank account]. “


How to get financing for a cannabis business

Ball Family Farms is just one of the few businesses that achieves this goal, and it always comes with a whole new set of challenges. They are subject to thousands of dollars in monthly fees on top of what it costs them to run a successful cannabis business.

The real tax on cannabis possession

Regarding the additional fees banks have to pay for cannabis companies, Charles says, “It’s not cheap. You talk about a few thousand to have that account per month… but the benefit of having a bank is worth it because now we can look at different loans and things like that. It’s definitely not traditional banking, but I don’t need to have cash anymore, so I’m not complaining.

Yet even though they no longer have to lug around money, anxiety and stress remain from years gone by.

“Even now with the bank, you have some anxiety. It’s not about what [burglars] are going to get, it’s about what they think they are going to get. I think all the time “What if someone thinks I still have money?” I can’t let my guard down because at any moment an idiot might think this is the one.

“It’s a constant wear and tear on you and you have to constantly think ‘Damn, I wish I could just be normal.’ It’s constant mental wear and tear and the only thing that can help you is to understand that there is an end, hopefully, with some kind of banking service. ”

Dante Jordan

Danté Jordan is a former member of Leafly’s Subject Matter Expert Team, and current freelance writer, video producer and media consultant specializing in cannabis cultivation, strains, products, education and all. which concerns this little green flower. Contact him at smokingwithdante on Instagram, or dantenetworks (at) gmail (dotcom). Its website is

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