Bank Solutions For Marijuana Merchants | Marijuana Dispensary Merchant Accounts

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To the delight of the medical marijuana industry, it’s a season of growth. The campaign to create a medical marijuana program in New York was a very long, uphill battle. Even when it was finally passed in 2014, advocates criticized the many restrictions imposed. Known for being again the legalization of marijuana, many were pleasantly surprised and relieved when Gov. Andrew Cuomo agreed to sign legislation granting five licenses to grow marijuana. Although, the number of dispensaries in the state was capped at 20.

Since then, Gov. Cuomo administration has made many changes. Home delivery of the drug has is now permitted. Chronic pain was added to the list of eligible conditions, and nurse practitioners are now allowed to prescribe the drug. More than 20,000 patients and over 1,000 practitioners have been registered.

Although he still openly opposes recreational marijuana, Gov. Cuomo has been become more accepting of medical marijuana. In June, the state Senate voted to add PTSD to the list of illnesses and ailments eligible for the state’s medical-marijuana program; this decision came six weeks after the Assembly’s decision to do the same.

On August 1, the New York State Department of Health announced that it had licensed five new medical marijuana companies. This addition doubled the number of firms growing and selling medical marijuana products under the (strictly) regulated state program. The new businesses joining the industry are New York Canna, Fiorello Pharmaceuticals, Valley Agriceuticals, Citiva Medical and PalliaTech NY.

Despite growth, there are still many obstacles to overcome, and plenty of issues merchants are currently struggling with. For example, on behalf of four of the five original companies, the New York Medical Cannabis Industry Association, sued the state to try to stop the issuance of new licenses. The claim was that this issuance was an overreach of legal authority.

According to Times Union, “The association claimed that not only would DOH be overstepping its legal authority by issuing more than five licenses, it would imperil the nascent industry because demand for medicine does not warrant doubling of the supply market.”

Another large issue merchants and medical marijuana businesses experience is finding payment processing solutions. Although medical marijuana is legal in New York, it is still illegal at the federal level. With strict federal regulations, banks won’t touch cannabis businesses. An increasingly popular solution is a marijuana merchant account from an alternative provider like MMA. These accounts allow these merchants to avoid operating in cash-only by providing the ability to process credit and debits cards and e-checks.

Regardless of those who have tried to stall progress, the New York medical marijuana industry is moving forward. Even with the many obstacles, it continues to grow and merchants are finding the solutions they need to grow a thriving business.

The news is full of updates on the state of the marijuana industry. Reports of which states have legalized recreational and medical marijuana, along with the many reasons why cannabis is beneficial. One of the less mentioned topics is the nerve-racking process these marijuana merchants go through to complete otherwise simple, mindless business tasks.

Consider the state of California, for example. On January 1, 2018, recreational marijuana will become legal in California. Coupled with the already legal medical marijuana, this could quickly push California to be the largest legitimate marijuana economy. However, there is one large, crippling aspect to the marijuana industry that makes it difficult – even dangerous – to operate in: most merchants can’t use a bank. An emerging marketplace, with a projected $7 billion value, finds itself operating in cash-only.

How is this possible? Marijuana is classified by the DEA as a Schedule 1 substance (high potential for abuse, with no currently accepted medical use in treatment in the U.S.), alongside heroin. Thus, it remains illegal under federal law. With intense federal regulation, banks do not want to handle the risks involved in working with businesses that offer cannabis product.

Within the next few years, California is expecting to collect $1 billion in new tax revenue from the marijuana industry. L.A. has an estimated 1,000 to 1,700 medical marijuana dispensaries. In 2016, only 200 paid city taxes. Next year alone, the state expects to collect $40 million.

This stunning amount must be processed through a bank, right? Think again. With no bank solution, these merchants must closely manage their cash to ensure they have enough to cover taxes. While other businesses send a check or wire the money via their laptop, marijuana merchants count their (massive) cash on hand, make arrangements to drop off the tax payment –hundreds of thousands of dollars in many cases – and then make a nerve-racking trip to the agency. The biggest fear is being robbed in route.

“When now everyone makes payments through their cellphone, it’s tough to see that I’m left to the archaic version of counting money”, says Jerred Kiloh, owner of the Higher Path medical marijuana dispensary in Los Angeles.

More and more merchants are beginning to discover the advantages of securing a merchant account to sell marijuana through an alternative provider like Marijuana Merchant Account (MMA). Specializing in working with the cannabis industry, these solutions provide safe and efficient payment processing options. No longer restricted to cash only, MMA offers credit and debit card processing and e-check processing. In an industry where merchants, banks and armored truck services fear backlash from the federal government, merchant accounts offer a real, safe solution for marijuana merchants.

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Tag Archives: Bank solutions for Marijuana Merchants

Medical Marijuana Industry Welcomes Season of Growth in New York

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