Maryland’s tax official said the state found a workaround to hide marijuana tax revenue from Wells Fargo financial forms. This is yet another example in the many creative workarounds cannabis businesses and regulators are using amid the federal prohibition.
Rob Scheerer of the Maryland Office of the Comptroller Revenue Administration Division said, “This was a big lift, and we had to do it,” at a Maryland Association of Counties Conference last week. “To protect the banks we can’t call this cannabis on the return.”
He added that “we have cleverly called this a sale subject to the 9% rate under Senate Bill 506 of 2023. ‘”
This legislation, which took effect on July 1, brought in the state’s legal marijuana system –as well a 9% tax on sales of adult-use cannabis. Sales to registered medical marijuana patients are tax-free. Scheerer, who declined to name the companies, said that some cannabis companies had already paid tens or even hundreds of thousands to the state. However, “the lion’s share” of the revenue will come in October.
Maryland Matters was the first to report on these comments.
During the first full month of adult-use marijuana sales in Maryland , licensed retailers moved more than 87 million dollars in marijuana products, which is nearly double what was sold in the preceding month when dispensaries only served patients.
Banks and credit unions may be penalized by the federal banking regulator if they work with cannabis businesses. This is because marijuana is still illegal under federal law. According to the 1970 Banking Secrecy Act money that is associated with federally illegal activities must be reported through a suspicious transaction report.
Marijuana Moment sent emails to Wells Fargo and the Maryland Office of the Comptroller on Tuesday.
The Secure and Fair Enforcement Banking Act (SAFE), which was reintroduced in April for the current legislative sessions, aims to alleviate banking problems caused by state-federal conflicts over marijuana. It would give banks that do business with cannabis a safe harbor if it were passed.
The progress on the bill has been slow. However, Senate Majority leader Chuck Schumer (D-NY), said in a press release late last month that work is continuing. He said that bipartisan negotiations are making “good progress”. He added that the advancement of SAFE would be a top priority in what should be “a very, very productive Fall in the Senate.”
A few days earlier, when Schumer was asked about the bill by a lobbyist, the majority leader replied that “we are working on it”.
In recent weeks, Sherrod Daines (R) and Sherrod Daines (D) of the Senate Banking Committee have argued over next steps. Brown insists that Daines must secure more GOP sponsors, but Daines says that Republicans are ready to pass the bill as agreed upon.
Section 10 is a source of controversy. Democrats, like Sen. Jack Reed of RI, have argued for revising or removing the provisions. They argue that they will undermine banking regulations. Republicans, however, consider that a “non starter.”
Daines also warned against trying to expand the measure to include social justice reforms, which progressives would love to add. However, his office told Marijuana Moment that the senator was “open” about adding the expungements language as proposed by Schumer.
Last month, the American Trade Association for Cannabis and Hemp, along with other trade groups representing marijuana businesses from 16 states and Washington D.C., sent a letter to Brown and Banking Committee ranking member Tim Scott (R-SC), urging them to “pass the cannabis banking legislation without further delay.”
Schumer also recently spoke to a cannabis industry leader, who approached him this summer at a non-related event. The person said that the Senate leader felt “confident” in the chances of passing the cannabis bank bill.
Sen. Tommy Tuberville, R-AL, has said he is a “yes”. He doubts that the Democratic leadership will deliver on its promise to complete the task this year.
Some lawmakers and advocates have proposed changes that they would like to see included in the bill. For example, expanding protections to include participation on major U.S. Stock Exchanges.
Other advocates have criticized the request, saying that it would be inappropriate to assist businesses at a time when efforts to legalize cannabis in Congress are stalled.
Jacky Rosen, a Nevada senator, said recently that the SAFE Banking Act should be passed with an amendment to allow cannabis businesses access to federal Small Business Administration services (SBA).
The legislators will continue “to work in a bipartisan manner” in order to accomplish the task.
In the first months of the new Congress, the majority leader has met with Democratic members and Republican members to discuss marijuana reform proposals which might be able to garner bipartisan support this year.
Sen. Cory Booker, D-NJ, has stated that lawmakers are trying to “resurrect the cannabis reform package. He acknowledged that the failure to advance an industry banking fix “literally” means hundreds of businesses will go out of business.
Rep. Earl Blumenauer, D-OR, who is the lead sponsor of the House’s version of the SAFE Banking Act said that it was important for advocates and legislators to align on any incremental proposal to end the war on drugs, cautioning against a “all or nothing” mentality.
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The article Maryland is ‘Craftily Coding Marijuana tax Revenue in Obscure Term To ‘Protect Wells Fargo’, State Official Said first appeared on Marijuana moment.
