The state’s marijuana industry is booming. In the first full year of legal recreational sales, people purchased $580 million worth of cannabis in Nevada.
The thing is, those are cash sales -- not by credit card or check because marijuana remains illegal at the federal level and only very few small banks and credit unions have set up accounts for the marijuana industry.
That means bills are paid in cash. Taxes paid in cash. And all that cash can be a big target for criminals.
That might be about to change in Nevada.
A new law signed in June will set up a banking system for the pot industry.
Nevada State Treasurer Zach Conine explained that the system will work like a casino, where cash is exchanged for chips. The chips are then used within that casino's closed system.
"What we're creating is an electronic token-based system that will exist within Nevada that will allow cash to become tokens within the system and then those tokens can transmit around between dispensary and production facility, production facility and cultivation, cultivation and, say, a plumber, and then back to the state for redemption as cash," he said.
The plan is to start the new system by July of next year, but it will start as a pilot program with volunteers from the industry.
Conine said the state wants to see what works before scaling up the bank to the rest of the industry.
The industry definitely needs a solution to this problem, said Ben Sillitoe, the treasurer of the Nevada Dispensary Association and CEO of Oasis Cannabis Dispensary.
“We pay a lot of bills in cash and that’s because most of our vendors, our suppliers are not able to accept checks, or maybe we’re having difficulty getting money into our bank account because we don’t have typical credit card processing that would just put money in there every day,” he said.
Despite the need, Sillitoe is concerned about whether consumers will adopt the new system.
"I think the key to all of this... is the adoption rate," he said, "Will consumers use this? Because at the end of the day, that's where all the money comes into the system."
Sillitoe pointed out that people like to purchase merchandise the same way they always have, and signing up for a different purchasing method may not be appealing.
Reservations about consumer habits aside, Sillitoe applauds the state for trying to solve the problem, which everyone agrees needs to be handled on the federal level.
"The end game here is we need a federal solution, but until they act on either the Safe Banking Act, which is still stuck in the Senate, or something else, Nevada needs to step in and protect its citizens," Conine said.
Ben Sillitoe, treasurer, Nevada Dispensary Association and CEO, Oasis Cannabis Dispensary; Zach Conine, treasurer, State of Nevada
