Tag Archives: Marijuana Banking

Banks Get Conflicting Message on Pot Funds

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Marijuana and Dollar notesEveryone knows that the legalized marijuana business is a moneymaker. However, marijuana is still illegal in the federal government’s eyes, and they can make the moneymaking ability difficult. Even though three states have legalized recreational marijuana, and others have legalized medical marijuana, state law is often trumped by federal law. While the House of Representatives recently renewed a law that protect legalized medical marijuana merchants from searches, seizures, and overall harassment from the feds (and DEA), but this leaves out one important issue: the banking issue.

The federal government regulates the banks, which may lead merchants to believe that banks should not be allowed to accept funds from legalized marijuana merchants. However, the feds and banks are sending mixed signals. The biggest new line of business for America’s biggest banks is, in fact, the legalized marijuana industry. While many believe the industry to be cash-based, and in certain aspects, it is, many choose to find marijuana payment solutions, such as the options offered by MMA. This helps keep your accounts safe from fraud. For instance, if a fraudulent charge hits, your processor and bank can help figure it out. If you are a “cash only” business and are dealt fraudulent bills, there is nothing you can do about it. “Cash only” businesses are also risky, as they are often targets of robbery.

Banks are now required by the feds to file “suspicious activity reports” on each customer. While intrusive, this can help keep businesses safe, and categorized better. Typically, marijuana payment solutions and their clients are considered “high risk” to the banking industry. This new system can help keep customers, merchants, and the entire industry safe and in check. However, while this idea is floating around, many big banks are not biting yet. They find that the risk is too big, especially due to the fed’s ability to override any state laws regarding the legalization of marijuana in any form. The best thing for all legalized marijuana merchants is to make sure that their marijuana processing solution is educated and up-to-date with all information and changes regarding the industry.

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Yet Another Bank Backs Out of the Medical Marijuana Industry

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imgresWith federal regulations being so strict in the medical marijuana industry, it’s incredibly difficult for marijuana businesses to work with banks. This leaves them with few choices such as dealing with cash transactions only. This comes with several complications and reduced profits.

The First Security Bank of Nevada has been working in the medical cannabis industry for over a year and has just recently decided to back out of the industry. With incredibly strict federal regulations, it was more a burden than it was profitable for them, causing them to exit the business before losing any more money.

Although over 23 states in the US have legalized the use of medical marijuana, the federal government is making it increasingly difficult for banks to work with dispensaries. With such foggy regulations and complex paperwork, most banks that are actually willing to attempt working with the industry find it to be more troublesome than it’s truly worth.

Medical Marijuana Payment Processing

When dealing with cash only, many risks arise. One of the biggest risks is transportation of the funds. Although most dispensaries work with high security transportation businesses for carrying the cash, some are still not capable of affording such a luxury. This makes cash transportation extremely risky.

Another downside is loss in profits. Not every patient can pay in cash, causing many patients to avoid buying medical marijuana altogether.

Fortunately, medical marijuana payment processing solutions are available. With high-risk payment processors such as MMA, dispensaries can in fact work with offshore banks to deal with transactions. Not only does it allow these businesses to increase their profits, but it also adds incredible amounts security.

Getting a medical marijuana payment processing account allows dispensaries to accept credit card payments and use the profits other than in cash only. It essentially allows marijuana businesses to experience the same amount of comfort as any other business.

An additional benefit is that merchant processors such as MMA provide merchants with mobile card readers. With most medical cannabis patients being quite ill and unable to physically go to dispensaries with ease, this is a huge perk. It provides dispensaries with the ability to make home deliveries. Getting a high-risk merchant account is the best solution available at the moment and far surpasses dealing with cash transactions only.

Contact us to get setup with Merchant Solutions for your MMJ business today!

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Congress Shows Little Interest in the Marijuana Industry’s Banking Problems

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Washington DC Capitol detail on cloudy skyDespite the pleas from marijuana businesses and medical marijuana users, Congress has revealed that it has no intentions of resolving and addressing the issue of legalizing marijuana any time soon. While nearly half of the states have one small victories in legalizing marijuana, it is still illegal on the federal level.

Congress has shown little interest in dealing with the conflict that continues between federal and state laws. The problem is that it has caused and continues to be an issue for the marijuana industry to find the banking solutions that they so badly need in order to operate.

This banking crisis has left business owners all over the country with no way to deposit their profits and to find payment processing solutions. In addition, those who wish to start a business in the industry are left with the difficult or impossible task of securing a small business loan via traditional lending sources.

In an effort to find a solution to the problem, a credit union was created in Colorado just for the marijuana industry. However, the only way this credit union can officially open its doors is through the approval of the nation’s top financial policymakers.

U.S. Rep. Scott Tipton recently stated in an interview that it is unlikely that the Federal Reserve will act anytime soon concerning this request by the marijuana-only Fourth Corner Credit Union for the direct access of the nation’s banking system. He did acknowledge the fact that he has been told privately by several bankers that they would like to be able to work with businesses that are legally growing and selling marijuana in Colorado; however, they fear being accused of money laundering in the eyes of federal law.

While Congress recognizes the need to bridge this gap that lies between state and federal law, no solution is expected anytime soon. In the meantime, Sens. Kirsten Gillibrand, D-N.Y., Cory Booker, D-N.Y. and Rand Paul, R-Ky., have introduced a bill that would ultimately end the federal prohibition of medical marijuana; thus, making it must easier for banks to work with medical marijuana businesses.

While things are still sorting themselves out, the marijuana industry has found other solutions to their funding and payment processing needs. Alternative lending providers that specialize in working with businesses considered “high risk” by traditional lenders have stepped up to the plate. They not only offer merchant cash advances that are better suited to the industry’s funding needs (in addition to being faster and more hassle-free), but they also offer safe and efficient payment processing solutions. Many marijuana businesses are finding their needs met by marijuana payment processing.

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