You need to physically have an armored transport take it to whoever is selling you the cryptocurrency.
Edit: I guess that's a potentially profitable but unfulfilled niche. Create a company that can take cash in big amounts and sell cryptocurrency. Not sure how feasible is it but that is the missing link as I see it.
The problem is they would fall under the same money laundering rules that banks are and would probably not want to take dispensary cash. Even if they do take the cash, where would they deposit it?
That just pushes the problem down the road to somebody else, though. At the end of the day somebody's going to have a huge pile of cash, and no bank will accept it without knowing where it came from.
I guess this really does boil down to a federal vs state legality then?
So if it's legal in a federal level then banks should be able to accept the cash right? or would they have a "right to refuse the business because we don't like it even if it's legal at the federal and the state level"?
I believe this is commonly referred to as an exchange. I believe there are quite a few in existence already.
Let's assume there is no federal vs state legality issues and instead it's just "legal". If selling X product generates large quantities of cash, is that organised crime?
I would think not, but then again I'm not a lawyer so I could be wrong. If I am wrong then yeah, the idea is definitely not sound.
Taking in large sums of cash and swapping it over for some cryptocurrency or another is bound to attract at least a few people who have need to launder cash. Thus, the service is likely to run afoul of Know Your Customer regulations etc etc.
As others have pointed out elsewhere in the comments, we ought, in my opinion, fully legalise and regulate the industry.
Selling marijuana in the United States is not a legal activity. It's a federally prohibited activity that if you are really successful at it (simply by amount of money made) can be charged as a felony with a mandatory life sentence (in the no-parole federal system, where a life sentence actually means life.)
But at some point, you, the skinny geek with your bags of cash and bitcoins is gonna run into people who have already solved this problem and have been doing it for the past 40+ years. The drug cartels. Probably gonna be some conflict there.