The Sacramento branch of the California tax collection agency reeks of marijuana.

That’s because it’s cash day at the collection center – when marijuana dispensary owners are allowed to bring in paper money to pay their quarterly sales tax bill – and the smell of their inventory clings to everything.

California, like all states with any form of legalized marijuana, faces a growing problem over the federal government’s position that cannabis remains a Schedule 1 illegal drug, classified the same way as meth or cocaine, with no legal uses – and therefore no legal access to traditional banks.

That means medical marijuana dispensaries, along with growers, distributors and other marijuana-related businesses that are operating legally under state laws, have no choice but to be cash-only businesses. They can’t write checks, deposit money in financial institutions or make credit card transactions.

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