Ohio proposes cashless system for medical cannabis businesses

Could Ohio have a solution to the marijuana industry’s cash-only problem?

The state’s new medical marijuana law proposes a closed-loop payment processing system that would rely on something similar to pre-paid debit or gift cards, according to Cleveland.com.

Legal marijuana companies have had to rely on cash-only transactions because banks, credit unions and credit card companies are reluctant to do business with them, given the uncertain federal regulatory environment.

Ohio’s Commerce Department is responsible for setting up the program’s payment system, but officials there haven’t made a decision about the plan, a Commerce Department spokeswoman told Cleveland.com.

According to Cleveland.com, state Sen. Bill Coley – who proposed part of the new law – told an audience at a marijuana conference in Columbus that patients and registered caregivers would put money in special accounts by check, credit card, or cash at a state-licensed liquor store or a state agency. The money in the accounts then could be used to make dispensary purchases.

Dispensaries, cultivators and other marijuana businesses would also have accounts, through which they would be able to buy products and pay bills. If a marijuana business needed to make a payment outside of the closed-loop system, the state would cut a check to the payee.

Coley said that every transaction would be available to the Financial Crimes Enforcement Network should they want to investigate a transaction. The agency is a part of the U.S. Treasury Department.

 

9 comments on “Ohio proposes cashless system for medical cannabis businesses
    • STEVEN NORTH on

      Paying Federal taxes should be very interesting. What if you are required to use EFTPS (no checks here) And, if you have a disagreement with the State, they can seize and then you get to request your money back.

      Reply
    • NOT a solution on

      A closed loop payment system will never be a solution for this space. You’re storing funds in a third party account that is subject to Fed seizure at anytime. Unfortunately we may see an example made of other closed loop “solutions” soon. Not good for the industry.

      Reply
  1. AmyX on

    The state wanting to hold all finances for any company is wrong! Do they do this to any other business? Do they become bookkeepers for the business, too? “We’re having a pizza party for our employees, can you cut a check to Famous Ray’s?”

    Reply
    • Matt on

      So basically, with the federal government keeping marijuana schedule I, the state would be doing this for the BENEFIT of the cannabis industry. It’s completely better than the alternative, and makes a fairly large amount of sense for a long term plan until Ohio passes a RMJ law. Even if it got rescheduled, MMJ is not RMJ and it would be treated like a prescription drug for the most part…that means enormous regulation and oversight. The dispensary and closed loop system wouldn’t make things any less smooth or any more watched (they purposefully see every transaction involving MJ anyway)…that being said, you’d probably see them go banks with rescheduling to save state funds.

      Reply
  2. Johnny V on

    I think its the best way to do it, there are MANY PROS of dealing with No Cash.. First no CASH Robberies, cant steal it if its Digital.
    Digital Cash always leaves a paper trail, so you can tract sales, expenses, etc, etc, easily with only one form of payment. It would eliminate a lot of crime with regards to buying weed with cash and having to hold large amounts of money..

    They should make all the sales Credit or Debit card ONLY!

    It makes life very easy for people buying it legally, and makes it tough for people trying to steal funds or purchase…

    Reply
  3. Sarihuana on

    Like a SNAP card, only with people providing the money themselves? Or a pre-paid credit card? Hmm. The last sentence in the post sounds creepy though. US Treasury Dept? I’m not sure I like that.

    Reply

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