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Yes and (Adjacently): Dispensaries also need access to basic financial services. Like merchant bank accounts. In my jurisdiction, dispensaries are still cash o

Yes and (Adjacently): Dispensaries also need access to basic financial services. Like merchant bank accounts. In my jurisdiction, dispensaries are still cash only. Because of federal law, banks won't touch weed money. (Ironic, given how many have laundered cartel monies.) IIRC, there's been security problems. Like stick-up robberies. Which increases risks and costs (more security). I know people working on weed policy. Harmonizing all the laws up and down the legal stack. Totally not my issue, so please correct me. -- My throwaway crazy uninformed idea: Merge the marijuana and state-run bank policy advocacy. So that dispensaries (et al) have a safe, convenient alternative to handling cash. Aha. WA State Rep Hasegawa proposed this policy in 2014. https://cannabisnow.com/washington-state-could-manage-marijuana-commerce-using-state-run-banking/ https://cannabisnow.com/washington-state-could-manage-mariju... Hasegawa is a great guy. So I'm probably repeating an idea I heard during some presentation (and not being original). Any way. SanFran should create their own bank for their own small businesses, including dispensaries. Edit: Maybe even just start their own credit union. Like a union of local small businesses. Sponsored by the local chamber of commerce and partially underwritten by the city. Totally spitballing here; I have zero knowledge about this stuff. Sorry. I no idea about the current status of state-run banking, in WA, CA, or else where. In general terms and in principle, I support anything that takes power away from commercial, publicly traded banks.

agency 5y ago
Yeah it's weird, at my dispensary in WA they do have some setup where you can pay with a (debit) card but in addition to a $3 service fee they also for some reason have to round up to the nearest multiple of $5 and give you cash back.
- genocidicbunny 5y ago
  The fees and rounding are because in a roundabout way, they're still just using cash. They just have a portable ATM terminal -- if you check your transactions it will probably show up as an ATM withdrawal. That's also why they also only accept debit cards.
gumby 5y ago
I had a business plan to fix this but it was hard to get it funded, even by the heavy investors in the legal pot business, because of fear of the feds. It’s a shame because it broke no banking laws according to my lawyers, but of course the feds can lean on the big funds. The short answer was to do all the banking in Canadian dollars where it’s entirely legal. Independent of pot, Canadian banking laws are set up for these sorts of arrangements while the US banking system is far more conservative. Drop me a note if you are interested in giving it a try and I can tell you more.
- fragmede 5y ago
  I'd be fascinated to hear more about how your CAD idea wasn't going to contravene any US laws while giving the cannabis industry access to the banking industry. If you're exclusively in Canada then the US Feds are nowhere near as much of a concern, but then that also doesn't get you any access to the US market, which seems to be the point. Let's say the legal pot industry on near the northern US border switched over to Canadian dollars to get this system to work, it still seems you'd need to get Canadian dollars to Canadian banks (because they can't be deposited at US bank accounts because the issue is that pot businesses can't make deposits to US bank accounts, not the nature of the cash being used.) Buuuut... aren't there rules about moving more than $10k (USD) cash, or equivalent financial instruments (aka CAD) across the border?
  - gumby 5y ago
    FWIW I was only interested in the business niche -- I'm uninterested otherwise in the business of (or consuming) pot at all. And the business niche is getting rid of cash, following the rules, and increasing privacy. First, Canada has banking sandboxes (you can open a bank but the deposits are held by another, larger bank, which is required to offer this service. I think the idea originated in the UK but a bunch of countries are doing this now). So the company opens a bank in Canada, and follows all banking laws scrupulously to a T. The only reason to open a bank is simplicity. Alice runs a shop selling pot. She downloads the app and opens a business account. She needs to submit all the KYC and tax info necessary to open a bank account, file her tax returns etc. As a result she gets a bank account, a debit card for her account, a (canadian checkbook) and of course the app. We of course know where she is and what the state laws are. Bob wants to buy some pot. He installs the app and opens a consumer account. He needs to provide his DL and credit card. Bob visit's alice's shop. She sells him something for $10. She could quote it in CAD or USD or perhaps the company would call them "potbux" or something. Whatever, Bob pays via the app, which charges his credit card. Now Alice can be sure Bob is old enough to buy (without needing to check his ID or even know who he is -- just make his photo (in the app) looks like him). Bob's payment goes straight into Alice's bank account -- no cash. End of story. Now if alice needs some money she can just use her debit card, make a bank transfer or whatever. She can shop at the grocery store, buy a plane ticket, go to wal-mart or a restaurant or whatever, completely legitimately and no different from anyone visiting the US from Canada. Note that her suppliers can take these canadian dollars too. So if she needs to buy some stuff (grow lights? some kind of display? I don't know), she and the seller could just use potbux directly and have no exchange rate issues. The company doesn't need to be involved. And as for the paperwork, the company can generate all the paperwork necessary for state and federal taxes, treasury bank account info etc making it trivial to obey all the laws. She doesn't have to worry about a police sting because of a fake ID or anything like that -- she doesn't even have to know anything about the buyer except "do they look like their photo". This business would be super easy to set up and require minimal capital.
fragmede 5y ago
Of the lesser known things that San Francisco has done in this sphere, is that the SF Office Of Cannabis gave those that were materially oppressed by the War on Drugs [1], a leg up on starting cannabis-related businesses. They gave them a year's head start a few years ago before licensing was available to all, and now there's a government-run incubator. [1] https://officeofcannabis.sfgov.org/equity/applicant#equity-conditions https://officeofcannabis.sfgov.org/equity/applicant#equity-c...

agency 5y ago

Yeah it's weird, at my dispensary in WA they do have some setup where you can pay with a (debit) card but in addition to a $3 service fee they also for some reason have to round up to the nearest multiple of $5 and give you cash back.

genocidicbunny 5y ago
The fees and rounding are because in a roundabout way, they're still just using cash. They just have a portable ATM terminal -- if you check your transactions it will probably show up as an ATM withdrawal. That's also why they also only accept debit cards.

gumby 5y ago

I had a business plan to fix this but it was hard to get it funded, even by the heavy investors in the legal pot business, because of fear of the feds. It’s a shame because it broke no banking laws according to my lawyers, but of course the feds can lean on the big funds. The short answer was to do all the banking in Canadian dollars where it’s entirely legal. Independent of pot, Canadian banking laws are set up for these sorts of arrangements while the US banking system is far more conservative. Drop me a note if you are interested in giving it a try and I can tell you more.

fragmede 5y ago
I'd be fascinated to hear more about how your CAD idea wasn't going to contravene any US laws while giving the cannabis industry access to the banking industry. If you're exclusively in Canada then the US Feds are nowhere near as much of a concern, but then that also doesn't get you any access to the US market, which seems to be the point. Let's say the legal pot industry on near the northern US border switched over to Canadian dollars to get this system to work, it still seems you'd need to get Canadian dollars to Canadian banks (because they can't be deposited at US bank accounts because the issue is that pot businesses can't make deposits to US bank accounts, not the nature of the cash being used.) Buuuut... aren't there rules about moving more than $10k (USD) cash, or equivalent financial instruments (aka CAD) across the border?
- gumby 5y ago
  FWIW I was only interested in the business niche -- I'm uninterested otherwise in the business of (or consuming) pot at all. And the business niche is getting rid of cash, following the rules, and increasing privacy. First, Canada has banking sandboxes (you can open a bank but the deposits are held by another, larger bank, which is required to offer this service. I think the idea originated in the UK but a bunch of countries are doing this now). So the company opens a bank in Canada, and follows all banking laws scrupulously to a T. The only reason to open a bank is simplicity. Alice runs a shop selling pot. She downloads the app and opens a business account. She needs to submit all the KYC and tax info necessary to open a bank account, file her tax returns etc. As a result she gets a bank account, a debit card for her account, a (canadian checkbook) and of course the app. We of course know where she is and what the state laws are. Bob wants to buy some pot. He installs the app and opens a consumer account. He needs to provide his DL and credit card. Bob visit's alice's shop. She sells him something for $10. She could quote it in CAD or USD or perhaps the company would call them "potbux" or something. Whatever, Bob pays via the app, which charges his credit card. Now Alice can be sure Bob is old enough to buy (without needing to check his ID or even know who he is -- just make his photo (in the app) looks like him). Bob's payment goes straight into Alice's bank account -- no cash. End of story. Now if alice needs some money she can just use her debit card, make a bank transfer or whatever. She can shop at the grocery store, buy a plane ticket, go to wal-mart or a restaurant or whatever, completely legitimately and no different from anyone visiting the US from Canada. Note that her suppliers can take these canadian dollars too. So if she needs to buy some stuff (grow lights? some kind of display? I don't know), she and the seller could just use potbux directly and have no exchange rate issues. The company doesn't need to be involved. And as for the paperwork, the company can generate all the paperwork necessary for state and federal taxes, treasury bank account info etc making it trivial to obey all the laws. She doesn't have to worry about a police sting because of a fake ID or anything like that -- she doesn't even have to know anything about the buyer except "do they look like their photo". This business would be super easy to set up and require minimal capital.

fragmede 5y ago

Of the lesser known things that San Francisco has done in this sphere, is that the SF Office Of Cannabis gave those that were materially oppressed by the War on Drugs [1], a leg up on starting cannabis-related businesses. They gave them a year's head start a few years ago before licensing was available to all, and now there's a government-run incubator. [1] https://officeofcannabis.sfgov.org/equity/applicant#equity-conditions https://officeofcannabis.sfgov.org/equity/applicant#equity-c...