Legal cannabis businesses in California might soon be able to pay their taxes using cryptocurrencies. Activist group Blockchain Advocacy Coalition (BAC) has sponsored a bill in California’s 19th State Assembly District that was proposed by Assembly member Phil Ting. If this proposal becomes a law, it would remove one of the major obstacles in the legal cannabis business.
According to federal law in the United States, banks are not allowed to serve businesses involved in cannabis. Because this is a federal law, this would also be to case for businesses in cannabis-friendly states like California. Instead of carrying bags of money to the tax office, these businesses would be able to transfer money using cryptocurrencies.
“The current recommendation from the state of California to cannabis businesses is that they use armored vehicles to pay their taxes,” said spokesperson Alexandra Medina of the BAC according to Bitcoin Magazine. “It’s closer to how one might pay taxes during the gold rush, with a stage coach and gunman, than how you would expect California to accept taxes in 2019.”
The bill will be reviewed in March and April, as it needs to be approved by Assembly by the end of May. The same process will be repeated by the Senate, which needs to happen before September 13th 2019. If all this goes smoothly and the governer signs the bill by October 13th 2019, the new law will be implemented by June 2020.
There are several cannabis related cryptocurrency projects on the market. Most of them focus on payments between farmers and medical businesses, while others are more about creating a financial structure.
Potcoin (POT) is a Proof-of-Stake coin that’s been around since early 2014. CannabisCoin (CANN) is quite a small project, that came into existence around the same time. HempCoin (THC) is probably one of the biggest projects, used by the farming industry and medical/recreational dispensaries. However, it’s not used for weed alone. Paragon (PRG) wants to create transparency around the production and sale of cannabis. They are building seed-to-sale tracking software, and their PRG is the foundation for it all.
Also published on Medium.