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Medical Marijuana Dispensaries Forced To Truck Bags Of Cash To IRS Office To Pay Taxes

OAKLAND (KPIX 5) -- There's plenty of green to go around at the Harborside Health Center in Oakland, and there's even more of it in their safe. Because the medicinal marijuana industry is legal in the state, but not federally, Harborside can't use banks or credit cards for anything - including paying taxes.

"It's absurd. It's dangerous. It is not in the interest of public safety," Andrew DeAngelo of Harborside Health Center said.

It has become a major issue. Marijuana is a major taxable industry in the state. The more than 1,600 dispensaries bring in close to $570 million of taxable income each year. But, the problems is when they bring it in by hand to pay taxes.

"We have to bring duffel bags full of cash to the IRS office in San Jose.

That means someone is responsible for carrying those to the unsecured office, because armored cars aren't acceptable either. While Harborside takes every precaution to ensure its tax-paying-employees' safety, there is no guarantee.

"It's dangerous to carry duffle bags with hundreds of thousands of dollars anywhere, let alone a major metropolitan area," DeAngelo said.

Dispensaries want a better option, and so do many on the Board of Equalization - the branch in charge of taxing dispensaries. It says only about a third of dispensaries adhere to tax laws, and with a better system of payment, the state could cash in on millions of dollars left on the table by bad reporting.

In an op-ed written by BOE member Fiona Ma, she says, "we need to address the lack of banking and financial services directly if this industry is to truly move out of the wild west economy it has been operating in for almost 20 years."

2016 is expected to bring in the highest revenues yet, and the risks, Andrew worries, will rise with it.

"It is extremely unsafe for our staff, and it is something I lose a lot of sleep over quite frankly," DeAngelo said.


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