Dozens of dispensaries in Colorado have set up “shadow” banking systems that allow them to accept credit and debit cards from customers – even though such practices could set them up for potential money laundering charges, according to a report by a local TV station.
Fox31 Denver found that 47% of 78 state-licensed dispensaries it polled reported being able to take credit and debit cards.
While medical marijuana companies have been using shadow banking systems for years, the high percentage employing it in Colorado surprised some banking experts, according to the report.
And conversely, the name of the actual shop where the customer makes a purchase isn’t reflected on a credit or debit card statement – or on the receipt from the purchase.
Federal regulators haven’t shown a desire to actually target vendors that employ this strategy. If a bank or credit card company finds out, though, the account is often terminated.