As if you do not already have enough to remember in running your cannabis business among all the rules, regulations, and reporting requirements, here’s one more thing for you. Businesses that deal in cash need to remember IRS Form 8300. The IRS requires that all businesses — not just banks — report cash transactions exceeding $10,000. If you follow this nifty FAQ, you will see that your cannabis business (almost certainly a wholesaler) will need to file Form 8300 within 15 days after the date you receive a cash payment of more than $10,000, in the following circumstances:
- One lump sum of over $10,000, or
- Two or more related payments totaling more than $10,000, or
- Payments received as part of a single transaction (or two or more related transactions) that cause the total cash received within a 12-month period to total more than $10,000.
If received in the course of trade or business, from the same payer (or agent), and received in a single transaction or in two or more related transactions.
Cash in these situations means currency and coins, however, Form 8300 may also need to be filed for transactions involving cashier’s checks, bank drafts, or money orders if:
- The transaction is a retail sale of a consumer durable, a collectible, or a travel or entertainment activity (rare for wholesalers), or
- Is a transaction in which the recipient (you) knows the payer is trying to avoid the reporting of the transaction on Form 8300.
You should remind your sales and accounting departments of these rules, as they can be easy to forget.
It will not be rare for cannabis wholesalers to receive $10,000 cash payments, so these rules likely will sometimes be relevant in your business. The feds treat the $10,000 reporting rules similar to how they treat certain types of drug possession and tax evasion — they use them as a way to nab people they suspect of bigger offenses. In this case, an attorney who failed to file a Form 8300 for money received from the illegal sale of marijuana got 18 months in prison. Did he really get that for forgetting a form? No, it appears he got such a stiff sentence for holding large amounts of money for illegal drug trafficking, but the indictment was for not filling out a piece of paper.
Bottom Line: This stuff is serious. Make sure you take care of it.