100s of Marijuana Stores, Dispensaries Cut Off From Cashless ATM Accounts

By John Schroyer and Chris Walsh

Hundreds of medical marijuana dispensaries and recreational shops across the country abruptly lost their cashless ATM accounts on Wednesday with no explanation, according to sources close to the situation.

One insider told Marijuana Business Daily that at least 300 to 400 shops were affected, and he warned that the number could double in the next few days.

Several sources who spoke about the situation asked not to be named, saying it could harm their businesses.

Many of the companies affected are reportedly rec shops located in Colorado and Washington State, though some medical cannabis dispensaries in those states and other markets lost their cashless ATM services as well.

The businesses were not given any advanced notice – the cashless ATMs simply stopped working. As a result, the shops can only take cash until they find another solution.

Cashless ATMs are PIN-based systems that allow patients to use their debit cards or get a cash advance on their credit cards, which can then be used to pay for cannabis. The card charges are recorded as withdrawals, without specifying what the money is used to purchase.

The reasons behind the move are unclear, but one source said that most of the accounts are tied to MetaBank – a major financial institution supporting ATM services. Many other cashless ATM services affiliated with other banks and processors reportedly are still up and running.

Businesses that lost their accounts had to scramble to accommodate customers, and some lost revenue as a result.

“We found out about this issue first-hand when ours went down this morning,” Kayvan Khalatbari, co-founder of Denver Relief in Colorado, said on Wednesday. “We’ve had to move to all-cash today. It was pretty frustrating. We lost some business when that went down and customers didn’t have any cash on them.”

Denver Relief already has a new cashless ATM service provider lined up, and it should come online this week. Khalatbari said his shop lost 30% of its sales after experiencing a problem with its cashless ATM service in the past, so the long-term repercussions for stores that can’t find an alternative could be huge.

One source speculated that the move could be a result of pressure from the feds.

Another insider close to the situation offered a different explanation, though.

A few businesses apparently deliberately obscured the nature of cannabis-related accounts, according to the insider. The processor and bank found out and basically said “we’re shutting all your accounts down, and they should be deactivated by the end of business (Wednesday),” the source said.

The Washington-based financial services firm Guardian Data Systems even took the step of sending out an email blast Wednesday night to its clients, warning them of the situation and assuring them that Guardian had not been affected by the shutdown.

“We have been told that all terminals and ATMs located in dispensaries will be deactivated by the end of the day TODAY,” the blast reads.

17 comments on “100s of Marijuana Stores, Dispensaries Cut Off From Cashless ATM Accounts
  1. Brad Zerman on

    I confirm that MetaBank took steps to terminate all it’s business with dispensaries and rec shops. All other primary sponsor banks to the ATM industry also ban this type of business but some crafty proprietors are able to effectively navigate the system. If you want to send me a message through our website http://www.skyprocessing.com we will keep you abreast of any new sponsor banks interested in accepting this business.

    Reply
  2. Jahpharmer on

    Wise up folks. Until Federal Laws change marijuana business is still seen as a criminal enterprise. ATMs could be quick and easy traps by providing your name and your bank account to your local federal prosecutor…and it would be easy for such feds to also label your transaction as part of a conspiracy (“…two or more people…committing a crime”), which has even harsher consequences.

    Take a moment to stop at your local convenience store’s ATM for a cash withdrawal B4 going to your local medical or recreational cannabis shop. If your life is so busy you don’t want to take the time to do this, then, well, you just might find yourself with lots ‘n lots of time as a guest down at your local jail.

    And, in the meantime make sure you vote, make sure all your friends vote to change federal laws, get rid of them completely!, that continue to make cannabis illegal.

    Nun said 4 now.

    Jahpharmer

    Reply
  3. Glenn Charles on

    Jahp., there is one problem with your scenario. Doing so to obscure the nature of an illegal transaction is in itself a crime. Oregon never fully agreed to criminalizing marijuana though it was forced to do so to some extent (the feds were going to cut off a substantial portion of funds, naturally), so it and Alaska are the two. They really never have cracked down on marijuana dealers in Southern, Central, or Northern Oregon (yep, experience). However…you are correct in one respect; having an ATM ensures attention and actually brings in a whole new set of potential violations.

    If you don’t smoke pot, use any illegal drug, don’t drive drunk and so forth and think you are entirely clean, you are (as of 1969)…

    breaking at least one law a day.

    And have a nice day.

    Reply
  4. Michele Brooke on

    MetaBank’s decision is unfortunate. Once the industry becomes more mainstream (which it will), some clients might remember this “slight” by MetaBank and look to do business with other companies who have been loyal during the “awkward” times.

    Reply
  5. Jones on

    Lets all vote to stop weed dispensary, their a money making joke who don’t have no education background to get the business! It should only be a business by people who are educated to know what their selling and doing!

    Reply
  6. Traci Cox on

    I work in the IT industry and came from finance. I am focusing my career in helping to bring technology and finance options to the cannabis community this includes services like credit card abilities. I think it is outrageous that a company would just pull the plug without regards to people’s medical needs. Some may have needed assistance to get to the dispensary, others may have not had the cash option close by and were in pain. Having firsthand experience in how this form of medication helps cancer and seizure patients I am angered that any company would be so unprofessional. In what other medical industry would they treat the end patient so poorly? This just adds fuel to my quest on helping to change the mentality of the limited thinking within the finance and technology industry.

    Reply
  7. Robert L. on

    Stupid descision by MB. Is my disp gonna finance my account? lmao…I go to the ATm for cash, and I go to my disp for meds. Thanks MB for eliminating the one stop convienience for me with your BS. Feeling political pressures perhaps? Well eff you from a LAC

    Reply
  8. Rhett Baylies on

    They were shut down because of unethical service providers taking advantage of the industry – not necessarily the financial system. Instead of setting up TRUE cashless ATM accounts the account reps MIS-Coded the accounts and ran them through the Debit network. This is still considered money laundering on a Federal Level!!! If your business or local dispensary was shut down and would like be set up with a Real Cashless ATM have them call the Merchant Doctor – they know what’s up and what is legal! http://www.merchantdoctor.net

    A cashless ATM can not only be a huge asset for business owners but also addresses the many safety concerns that plague the industry. The safer, more profitable and more professional cannabis businesses are – is good for the industry as a whole, progressive policy making, and public perception.

    Reply
  9. BIGROBBIE BRIGGS on

    INM THINKING FING SUCKS WHEN THE BURACRATIC BS WHEN THE CASHLESS ATMS WHENT DOWN I THINK THEY SHOULD LITEN UP PEOPLE LIKE ME NEED MARY JANE TO HELP W/MY ANGER ISSUSE & IT HELPS W/ MY ARTHRITIS PAIN SO FEDS LITEN UP I DONT HAVE CASH ALL THE TIME TO AFFORD IT SO WHEN I DO I WOULD USE MY DEBIT CARD SO GET THIS SITUWATOIN TAKING CARED OF ASAP

    Reply
  10. Funyfarm on

    I’m laughing my fat ass off at the comments. Not the situation. You guys r funny. Anger issues all in caps. Dimbass’s that caint spell so gud. Wantin only smarter people. Lol. U guys are killing me. Weed always has been and will always be a CASH business. Nuf said roflmfao!!!

    Reply
  11. Brad Zerman on

    Rhett Baylies – my last communication with contacts at Visa, MC and STAR also state that processing an surcharged ATM withdrawal over a POS Network is a violation of their Regulations. How is your system different? I was just in CO and amazed at the risks all the rec stores are taking utilizing these services against Network Rules and thereby jeopardizing their potential future access to these networks when credit card acceptance becomes mainstream down the road. We are operating ATMs in about 75 dispensaries and rec stores currently

    Reply

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