Missouri's health department wants to ban medical marijuana businesses from paying taxes in cash, a move that industry advocates say could shut out small businesses from the field.
Missouri voters in 2018 made medical marijuana legal but sales are still prohibited under federal law.
Financial institutions, particularly national banks, shy away from working with the cannabis industry because of the federal ban, BeLeaf CEO Mitch Meyers said. That forces some marijuana businesses to pay bills and salaries in cash.
Meyers said Missouri's proposed cash-only policy will also make it difficult or impossible for some businesses to pay state taxes.
"I don't know how you can tell people to abide by the law, but then say cash is no good," Meyers said.
The Department of Health and Senior Services did not immediately respond to a Friday Associated Press request for comment on the proposed policy , which also bans cash payments for fines and fees.
There are Missouri banks that will work with cannabis businesses, Missouri Medical Cannabis Trade Association spokesman Jack Cardetti said.
"But those options are not plentiful," he said.
Cardetti said the same issues with reluctant banks apply to getting cashier's checks.
The U.S. House of Representatives in September passed a bill that would grant legal marijuana businesses access to banking, but the measure still is pending in the Senate.
Meyers, who applied for state licenses to grow and sell medical cannabis, said it took years for her company to open an account with a state bank. She said state banks tend to take on only a few marijuana-industry clients, especially those with which they already have established business relationships.
Small, rural businesses and new business owners might have less luck opening accounts, she said.
Marijuana businesses in other states with legal recreational or medical cannabis use have faced similar issues, putting pressure on federal lawmakers to act.
Cardetti said the Missouri trade association wants the state health department to make exceptions to the ban on cash for businesses without bank accounts until banking becomes more widely accessible.
The health department is accepting public feedback on the proposal through Tuesday.