fbpx
QQQ
+ 7.05
312.29
+ 2.21%
DIA
+ 4.00
336.23
+ 1.18%
SPY
+ 6.32
403.85
+ 1.54%
TLT
+ 1.27
134.54
+ 0.94%
GLD
+ 1.54
169.61
+ 0.9%

Fintech Firm Offers Cannabis Companies A 'CashToTax' Platform In LA

May 21, 2020 10:25 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Fintech Firm Offers Cannabis Companies A 'CashToTax' Platform In LA

Fintech company Dama Financial has received approval from the Los Angeles Office of Finance to offer cannabis businesses a way to pay city taxes and licensing fees with cash.

Previously, the option of cash payments had been suspended due to coronavirus.

The All-Cash Problem

Before the COVID-19 outbreak, cannabis businesses were allowed to pay taxes by credit card, ACH, or cash by appointment. Many cannabis businesses would choose to do it in cash, since cannabis companies are often denied access to banking services, and handle most of their transactions in cash.

But since the coronavirus outbreak, Los Angeles suspended cash payment appointments in order to maintain social distancing. This left many cannabis businesses without an option to pay taxes and licensing fees, preventing the city from collecting a portion of cannabis taxes.

The “All-Cash Problem” is one of the industry’s most suffered regulatory hurdles, since it blocks cannabis businesses from accessing basic baking services. This results in businesses facing severe security hazards, being forced to spend extra in private security, while difficulting basic operations like payroll and tax payments.

CashToTax

The SAFE Banking Act, a bill that passed a House vote last year, could solve this issue by protecting financial institutions who choose to work with cannabis businesses from receiving federal punishment.

With the new partnership between Dama Financial and Los Angeles, more than 300 cannabis businesses in the city can use Dama’s “CashToTax” platform to arrange for cash to be picked up by armored courier and deposited into a dedicated FDIC-Insured account, from which tax and fee payments can be made online.

"The City of Los Angeles Office of Finance is pleased with Dama Financial's ability to support our cash paying cannabis businesses at a time when we are navigating an unprecedented disruption," said Claire Bartels, Director of Finance for the city.

Lead image by Ilona Szentivanyi. Copyright: Benzinga.


Related Articles

Can Cannabis Help Ease The Mind In The Age Of COVID-19? New Study Shows It Can

THE SEVENTH RESEARCH STUDY PUBLISHED BY THE UNIVERSITY OF NEW MEXICO AND RELEAF APP CONCLUDES THAT INDIVIDUALS REPORT CANNABIS FLOWER EFFECTIVE IN PROVIDING ANXIETY, STRESS, AND AGITATION/IRRITABILITY RELIEF.  read more

Zenabis Global's JV To Launch Operations In Malta

Zenabis Global Inc.'s (TSX: ZENA) Maltese joint venture, ZenPharm Limited, was given the green light to produce cannabis for medicinal and research purposes in the Mediterranean island country. read more

2 Republican Lawmakers Introduce Federal Cannabis Legalization Bill

Two Republican congressmen have introduced a bill that would bring federal cannabis legalization to the U.S. read more

Cannabis M&A Activity At All-Time Highs With Little Signs Of Slowing Down

Cannabis industry M&A activity continues to boom in 2021. Financial tech firm Refinitiv reported a 94% surge in M&A during Q1 2020. read more