CASH
The Problem
With Cash
BY: MARIO APRUZZESE
WITH THE cannabis industry growing every
day and regulations changing right along with
that growth, it should come as no surprise
that there are a few hiccups in the process.
One of the largest, believe it or not, is dealing
with money. Why? Even when legalized,
cannabis still carries a (unwarranted) stigma
that makes most financial institutions and
banks loathe to deal with them. With a bank
account, a cannabis company runs a risk of
having that account closed for any number of
reasons and then having to start over with no
assets. On the flip side, dealing with cash is a
big concern too.
The problems that come with operating a
primarily cash business are myriad, but here
are a few of the biggest:
• Having to pay employees and
contractors in cash, causing them
headaches of their own.
• Dealing with cash is a big security risk.
• Dealing with cash is simply a pain.
You have to be constantly vigilant
both inside the company and outside
the company to maintain security
and make sure everything is being
properly accounted for.
Cash also tends to lend additional credence
to the idea of cannabis being a “shady”
business, regardless of the invalidity of such
an idea. Perhaps more concerning than that,
though, is that dealing with large amounts of
cash is very likely to raise the ire of the IRS
and cause them to closely examine and audit
the businesses in question. With cannabis
still being illegal on a federal level, banks
won’t be of any assistance with this cash issue
because they don’t want to dip their toes into
it until they know they are safe. These issues
are pervasive, but they can be overcome with
the help of third-party solutions.
In terms of payroll, there are businesses
who will take cash and, in return, provide
paychecks and insurance. One of these is
Michigan Cash Payroll Services (MCPS),
owned by Mario Apruzzese, which provides
a full suite of HR solutions for marijuana
entrepreneurs. Mario has been a CPA for
years, working in many industries and
with experience in audit, tax, and financial
planning. He understands a business’s need
for good employees (in any industry), but
he also understands the need for those
employees to have their own needs met in
terms of finances. Without a real record
of income being provided in the form of a
paycheck, these people are left without the
ability to build stable finances or credit.
The process is relatively simple. A prospect
will connect with the company via its website
and provide the necessary information.
MCPS will then prepare a proposal within
48 hours and, should the prospect wish to
move forward, will guide them in an online
enrollment process that walks them through
the necessary steps to get to their first
payroll. MCPS offers what banks refuse to
offer cannabis companies: a complete HR
solution for cash-based businesses that
will not be shut down, yet still maintains
federal compliance standards and all of the
traditional protections.
The fact is, the time for the government
to do something about these banking issues
is long overdue. A business simply cannot
operate, in cannabis or any other industry,
30
with only the assumption that they are free
to operate if they are following the rules.
With the ever-looming threat of losing their
assets and their bank accounts hanging over
them, how can they be expected to grow? If
legalization is to move forward, it is essential
that businesses are able to rely on the same
stability that is afforded to other companies,
especially if they are following the many
regulations that have been put in place. To
continue stable, legal growth in the cannabis
industry, things have to change.
Mario Apruzzese
M Consulting Associates,LLC
MichiganCashPayrollServices.com
833-283-CASH (2274)