It was only a matter of time before the marijuana industry would be forced to come up with creative means to move their massive transactions and profits around in a safer and more practical way than the credit restrictions that were levied on the businesses who dared to invest in one of the fastest growing and most lucrative industries in America. Handling millions of dollars in paper currency is a joke no matter how you look at it, a joke that marijuana companies are tired being the butt of all these years, since California officially legalized it twenty years ago, to be precise.
Folks in Colorado know this game all too well. With an estimated $14 million being generated in profits every year, the absurd expectation to do business without the same access to banks that every other legal business has is unsustainable. The disingenuous attempt to pass legislation last year, by then Attorney General Eric Holder, allegedly allowing banks to serve marijuana businesses without fear of prosecution, did not nothing to alleviate this stress on entrepreneurs. The overruling law is still the same: marijuana is an illegal, schedule I drug in the eyes of the federal government, which is still being liberally enforced via raids and prison sentences.
With banks scoffing at the idea of dancing with the government on this issue, it is once again up to the marijuana pioneers to assume all risk to grow their business by engaging in a roundabout way to enable their customers to use their credit cards to purchase their buds. In fact, a local Denver Fox News investigation has estimated that nearly half of all dispensaries accept MasterCard and Visa from their customers.
How do these dispensaries get around the fact that banks won’t do business with them? By doing business with a friend, who knows a friend, who will do business with them. That’s pretty much how buying pot has always been, it’s just received a new makeover to work on a much larger scale, benefitting the business and the banks, more-so this time around. The customer swipes their credit card, it’s charged to a holding company with no obvious ties to Colorado dispensaries, and the business transaction is completed with no red-flags raised on the person’s account.
There’s no way to know if this loophole will be targeted by the Feds, or if it will be tolerated due to the massive business influx to banks, making them lobby hard to prevent the feeding tube from being severed. One thing is for certain, the customers could not be happier that they no longer have to carry large sums of cash on them to go get their medicine, and businesses can finally put a dent in their massive physical burden caused by transporting cash around and hiring of armed security just to keep from losing everything, and no hope to recover from such a robbery, with no insurance.
Photo courtesy of MarijuanaCreditcardProcessor.com