{"id":739,"date":"2021-08-27T17:41:18","date_gmt":"2021-08-27T17:41:18","guid":{"rendered":"https:\/\/www.leafly.com\/wp-home\/?p=176323"},"modified":"2021-08-27T17:41:18","modified_gmt":"2021-08-27T17:41:18","slug":"the-dangers-of-running-a-multimillion-dollar-cash-business","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=739","title":{"rendered":"The dangers of running a multimillion-dollar cash business"},"content":{"rendered":"<p>  <title>The dangers of running a multimillion-dollar cash business | Leafly<\/title>     <!-- Quotes = strings--><!-- No quotes = boolean-->\t   <!-- This site is optimized with the Yoast SEO Premium plugin v15.9.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->                  <!-- \/ Yoast SEO Premium plugin. --> <\/p>\n<p> <!-- BEGIN Sailthru Horizon Meta Information --><\/p>\n<p><!-- END Sailthru Horizon Meta Information -->  <!-- Google Publisher Tag --> <!-- End Google Publisher Tag --> <!-- Google Tag Manager --> <!-- End Google Tag Manager --> <!-- Chartbeat --> <!-- End Chartbeat --><br \/>\n <!-- Google Tag Manager (noscript) -->   <!-- End Google Tag Manager (noscript) -->   <title>Leafly<\/title>     <title>Leafly \u00ae<\/title>                                                                                                                                                                                                                                                                                                                                                                                              <title>Loading\u2026<\/title>     <\/p>\n<div class=\"bg-white fixed flex hidden inset-0 items-start md:h-auto md:items-center overflow-auto\" id=\"age-gate-container\">\n<div class=\"bg-white md:h-auto mx-auto p-lg text-sm w-full\" id=\"age-gate\">\n<p><label for=\"select-country\">Where are you from?<\/label><\/p>\n<div class=\"age-gate__info\">\n<p><button class=\"button\" data-testid=\"age-gate-no-button\" id=\"tou-cancel\">no<\/button><button class=\"button ml-md\" data-testid=\"age-gate-yes-button\" id=\"tou-continue\">yes<\/button><\/p>\n<p><label class=\"checkbox__label my-xl\"><span class=\"text-xs\" id=\"remember-user-label\">Remember me for 30 days. <br \/>I confirm that this is not a shared device.<\/span><\/label><\/p>\n<p class=\"error error--underage hidden\">Darn! You&#8217;re not old enough to use Leafly.<\/p>\n<\/div>\n<p class=\"hidden age-gate__loading\">Redirecting you to<span class=\"redirect-domain\"><\/span><\/p>\n<p class=\"text-xs mt-auto\">By accessing this site, you accept<br \/>\nthe <a class=\"py-xl\" data-testid=\"tou-link\" href=\"https:\/\/www.leafly.com\/info\/terms-of-use\">Terms of Use<\/a><br \/>\nand <a class=\"py-xl\" data-testid=\"pp-link\" href=\"https:\/\/www.leafly.com\/info\/privacy-policy\">Privacy Policy<\/a>.<\/p>\n<\/div>\n<\/div>\n<div class=\"container my-xl\">\n<div class=\"row\">\n<div class=\"col md:col-9\" id=\"article-content\">\n<p class=\"has-black-color has-text-color\"><em>Cannabis businesses struggle to obtain and maintain banking while facing the dangers of having major cash on hand. <\/em><\/p>\n<hr class=\"wp-block-separator is-style-default\">\n<p>Due to <a href=\"https:\/\/www.leafly.com\/learn\/legalization\">cannabis\u2019 status as an illicit substance in the United States<\/a>, many banks don\u2019t want to run the risk of accepting weed dollars and facing extreme penalties or even closure.<\/p>\n<p>And while some companies eventually find banking, many cannabis business owners are left to deal with massive sums of cold, hard cash every day. It\u2019s not only highly inconvenient for anyone trying to maintain a legitimate business, but it also places the lives of cannabis business owners in extreme danger highlighting one of many huge problems with the federal prohibition of cannabis.<\/p>\n<p>Congress introduced the <a href=\"https:\/\/www.congress.gov\/bill\/117th-congress\/senate-bill\/910?q=%7B%22search%22%3A%5B%22safe+banking+act%22%5D%7D&amp;s=1&amp;r=1\" target=\"_blank\" rel=\"noreferrer noopener\">SAFE Banking Act of 2021<\/a> to create safe access to banking for cannabis businesses. There\u2019s language within the bill that prohibits the federal government from penalizing banks that take money from cannabis businesses. It would also allow banks to give loans to cannabis businesses. <\/p>\n<p>But while legislators like <a href=\"https:\/\/news.yahoo.com\/senator-cory-booker-clarifies-support-for-key-marijuana-banking-bill-104504846.html\" target=\"_blank\" rel=\"noreferrer noopener\">Senator Cory Booker<\/a> are fighting to make sure that the banking bill properly addresses social equity before it gets passed, hyper-local dangers of running a cash cannabis business remain.<\/p>\n<h2 id=\"h-the-cost-of-banking-in-cannabis\">The cost of banking in cannabis<\/h2>\n<figure class=\"wp-block-image size-large\"><img width=\"1024\" height=\"640\" alt=\"Top down view on single cash register drawer stocked full with \" class=\"wp-image-34168 has-ll lazyload\" data-srcset=\"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business-1.jpg,compress&amp;w=550 550w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business-1.jpg,compress&amp;w=740 740w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business-1.jpg,compress&amp;w=1100 1100w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business-1.jpg,compress&amp;w=1480 1480w\"><\/figure>\n<p>To gain some insight on the logistics and dangers of what it\u2019s like to run a multimillion-dollar cash business, Leafly spoke with Charles Ball, President and Chief Financial Officer of California\u2019s <a href=\"https:\/\/www.leafly.com\/brands\/ball-family-farms\">Ball Family Farms<\/a>.<\/p>\n<p>People like Charles have to keep hundreds of thousands of dollars of cash on them, along with buckets of change, so they can keep track of every single cent that goes in and out of the business.<\/p>\n<p> <a href=\"https:\/\/www.leafly.com\/news\/industry\/how-much-does-it-cost-to-start-a-cannabis-business\" class=\"wp-block-leafly-blocks-leafly-single-inline-block leafly-inline-related-story\"><\/p>\n<div class=\"border border-deep-green-alt border-l-0 border-r-0 my-xl p-md font-bold\">\n<p>Related<\/p>\n<p>How much does it cost to launch a cannabis business?<\/p>\n<\/div>\n<p><\/a> <\/p>\n<p>\u201cImagine you have to do everything in your life in cash, and that\u2019s it. You don\u2019t have a debit card; you don\u2019t have a checkbook; you can\u2019t do anything online, just cash. A contractor comes in, an electrician, does $60,000 worth of work. You\u2019ve got to have $60,000 worth of cash on you. It\u2019s daunting, and you have to have systems on systems on systems,\u201d says Charles.<\/p>\n<h2>The tax man cometh<\/h2>\n<p>Once operational costs are addressed, there are taxes. The IRS only accepts cash under very limited conditions, and you don\u2019t have a bank account, so writing a check is out. So, how <em>do<\/em> you pay taxes as a cannabis business?<\/p>\n<blockquote class=\"wp-block-quote has-text-align-center\">\n<p>\u201cYou have federal and state taxes and insurance policies [to pay.] They don\u2019t take cash. If you go into the federal system and try to pay your employees\u2019 federal taxes with cash, they\u2019re going to say no. You can send in two payments a month, and it has to be less than $2,000. If you do any type of payroll, taxes are easily $10,000 plus. The only other option is putting it in another account, but that\u2019s money laundering,\u201d says Ball.<\/p>\n<\/blockquote>\n<p>To pay their taxes, <a href=\"https:\/\/www.ballfamilyfarms.com\/\">Ball Family Farms<\/a> was only allowed to send $4,000 of payments to the government monthly. It put them in a position where they had a rolling balance on taxes due, which comes with extreme penalties. The business is currently negotiating the payment of the fees with the IRS, which equals up to total tax liability plus 25%(!!!). <\/p>\n<p>Charles recounts a time he went to a Los Angeles City Council meeting on taxes. <\/p>\n<blockquote class=\"wp-block-quote\">\n<p>\u201cI asked them, \u2018If we\u2019re paying you cash, where are you putting your cash? You\u2019re not just putting it under a mattress.\u2019 Their response was \u2018Next question.\u201d I even offered, \u201cI know you have a bank account, so can you just tell that bank to help us?\u201d They\u2019re like, \u2018Next question.\u201d<\/p>\n<\/blockquote>\n<p>Imagine having millions of dollars stashed around the city being your way of life. The stress, the anxiety, the everyday fear. To know that any moment you\u2019re one robbery away from having your business ruined, or one kidnapping away from tragedy, or one bullet away from no longer being on this earth because you grow weed as a career? <\/p>\n<p>It\u2019s terrifying, and it\u2019s real life for a lot of the people behind the companies that you buy weed from and even the stores where you buy weed. <\/p>\n<blockquote class=\"wp-block-quote\">\n<p>\u201cMy biggest fear would\u2019ve been if people thought that the money was at my actual house. That\u2019s where my kids live, but I never had any issues, thank God.\u201d<\/p>\n<\/blockquote>\n<p> <a href=\"https:\/\/www.leafly.com\/news\/politics\/leafly-seeds-of-change-2021-report-rates-states-on-marijuana-equity\" class=\"wp-block-leafly-blocks-leafly-single-inline-block leafly-inline-related-story\"><\/p>\n<div class=\"border border-deep-green-alt border-l-0 border-r-0 my-xl p-md font-bold\">\n<p>Related<\/p>\n<p>New \u2018Seeds of Change\u2019 report rates states on cannabis equity, finds most lacking<\/p>\n<\/div>\n<p><\/a> <\/p>\n<h2 id=\"h-protecting-a-growing-cash-business\">Protecting a growing cash business<\/h2>\n<figure class=\"wp-block-image size-full\"><img width=\"960\" height=\"576\" alt class=\"wp-image-4500 has-ll lazyload\" data-srcset=\"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business-2.jpg,compress&amp;w=550 550w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business-2.jpg,compress&amp;w=740 740w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business-2.jpg,compress&amp;w=1100 1100w, https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business-2.jpg,compress&amp;w=1480 1480w\"><\/figure>\n<p>To protect their assets before they got banking, Ball Family Farms used safe houses around the city. They had three or four at any given time. The only people who knew where they were were Charles and the brand\u2019s CEO, Chris. They\u2019d even sometimes hide the locations from one another, leaving no one person with the location of all the cash. <\/p>\n<p>But that was just one of the many security systems Ball had in place for the past four years before finally finding banking in 2021.<\/p>\n<p>Charles explains, \u201cWe had multiple safe houses. We would never put all of the money in one specific spot. We made sure it was heavily secured. Most people understand that cash is a cash business, so some of the precautions that I would use personally: never drive to the safe house directly from work; never carry too much cash; make sure that I take specific routes to each different safe house, etc.\u201d<\/p>\n<h2 id=\"h-how-banking-helps-cannabis-business-owners\">How banking helps cannabis business owners<\/h2>\n<p>After four years of going door-to-door to different banks pleading for some sort of aid, Ball Family Farms has finally managed to obtain a bank account. But Charles says it required a little help from one of their partners. <\/p>\n<p>\u201cI got in contact with that individual, and he was like, \u2018If you guys have all your paperwork and you guys can show the bank that you are legit and that you are tracking everything you\u2019re doing, you might have an option.\u2019 When we turned it in, they were like, \u2018Oh, you guys do everything by the book.\u2019 Since our practices were already geared towards being legitimate, it made it easier for us to [get the bank account].\u201d<\/p>\n<p> <a href=\"https:\/\/www.leafly.com\/news\/industry\/how-to-get-funding-for-a-cannabis-business\" class=\"wp-block-leafly-blocks-leafly-single-inline-block leafly-inline-related-story\"><\/p>\n<div class=\"border border-deep-green-alt border-l-0 border-r-0 my-xl p-md font-bold\">\n<p>Related<\/p>\n<p>How to get funding for a cannabis business<\/p>\n<\/div>\n<p><\/a> <\/p>\n<p>Ball Family Farms is just one of very few companies to achieve this goal, and it still 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.<\/p>\n<h2>The real tax of cannabis ownership <\/h2>\n<p>On the extra fees that cannabis businesses get hit with from banks, Charles says, \u201cIt\u2019s not cheap. You\u2019re talking about a few thousand to actually have this account per month\u2026but the benefit of having a bank is well worth it because now we can look into different loans and things like that. It\u2019s definitely not traditional banking, but I no longer have to carry cash, so I\u2019m not complaining.\u201d<\/p>\n<p>Still, even with them no longer having to tote cash around, the anxiety and stress remain from the years past.<\/p>\n<blockquote class=\"wp-block-quote\">\n<p>\u201cEven now with banking, you have a certain anxiety. It\u2019s not about what [burglars] are going to get, it\u2019s about what they think they\u2019re going to get. I think all the time \u2018What if somebody thinks I still have cash?\u2019 I can\u2019t let my guard down because at any point in time some idiot could think that\u2019s the one.\u201d <\/p>\n<\/blockquote>\n<p>\u201cIt\u2019s constant wear on you and you have to constantly think \u2018Damn, I wish I could just be normal.\u2019 It is constant wear mentally and the only thing that can get you through it is understanding that there is an end to it hopefully with some sort of banking service.\u201d<\/p>\n<div id=\"author-box\" class=\"p-lg my-xxl bg-white rounded border border-light-grey elevation-low\">\n<div class=\"mb-lg\"> <img decoding=\"async\" src=\"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business.jpg\" alt=\"Dante Jordan's Bio Image\" class=\"lazyload inline-block mr-md rounded-full border border-light-grey\"> <\/p>\n<p>Dante Jordan<\/p>\n<\/p><\/div>\n<p class=\"text-sm\">Dant\u00e9 Jordan is a former member of the Leafly Subject Matter Expert team, and current freelance writer, video producer, and media consultant specializing in cannabis culture, strains, products, education, and everything else related to that lil\u2019 green flower. Contact him at smokingwithdante on Instagram, or dantenetworks(at)gmail(dotcom). His website is www.dantejordan.com.<\/p>\n<p> <a class=\"text-sm font-bold underline text-green\" href=\"https:\/\/www.leafly.com\/news\/author\/dante-jordan\">View Dante Jordan&#8217;s articles<\/a> <\/div>\n<div class=\"leafly-sailthru-signup p-lg my-xl bg-white rounded elevation-low border border-light-grey\">\n<p class=\"text-xs pt-lg\">By submitting this form, you will be subscribed to news and promotional emails from <a href=\"https:\/\/www.leafly.com\">Leafly<\/a> and you agree to Leafly&#8217;s <a href=\"https:\/\/www.leafly.com\/company\/tos\">Terms of Service<\/a> and <a href=\"https:\/\/www.leafly.com\/company\/privacy-policy\">Privacy Policy<\/a>. You can unsubscribe from Leafly email messages anytime.<\/p>\n<\/div><\/div>\n<\/p><\/div>\n<\/div>\n<p> <!-- Chartbeat --> <!-- End Chartbeat -->  <!--\nPerformance optimized by W3 Total Cache. Learn more: https:\/\/www.boldgrid.com\/w3-total-cache\/ Served from: _ @ 2021-08-27 10:41:25 by W3 Total Cache\n--><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The dangers of running a multimillion-dollar cash business | Leafly Leafly Leafly \u00ae Loading\u2026 Where are you from? noyes Remember me for 30 days. I confirm that this is not a shared device. Darn! You&#8217;re not old enough to use Leafly. Redirecting you to By accessing this site, you accept the Terms of Use and Privacy Policy. Cannabis businesses struggle to obtain and maintain banking while facing the dangers of having major cash on hand. Due to cannabis\u2019 status as an illicit substance in the United States, many banks don\u2019t want to run the risk of accepting weed dollars and&#8230; <\/p>\n","protected":false},"author":1,"featured_media":740,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-739","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-marijuana_information"],"jetpack_featured_media_url":"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/08\/the-dangers-of-running-a-multimillion-dollar-cash-business.jpg","_links":{"self":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts\/739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=739"}],"version-history":[{"count":0,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts\/739\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/media\/740"}],"wp:attachment":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}