By Marijuana Business Daily staff
Seattle tells medical marijuana businesses to do the impossible, 1,000-plus marijuana retailers lose their ATM accounts and Colorado continues to grapple with edibles.
Here’s a closer look at several notable developments in the cannabis industry over the past week:
Oh, the Irony
Seattle recently warned roughly 330 medical marijuana businesses within its borders to either obtain state business permits or close their doors. The problem? Those licenses don’t exist yet.
The situation couldn’t be more ironic: The second state in the country with legal recreational marijuana has no regulatory structure for MMJ companies, and yet Seattle is telling medical marijuana businesses they must be sanctioned by the Liquor Control Board in order to continue “conducting major marijuana activity.”
The city told MMJ companies that they have until either next July or the beginning of 2016 – depending on whether the state Legislature takes action – to get a license.
But even if the Legislature does manage to pass some form of regulations during its next session, which begins in January, it’s highly unlikely that the Liquor Control Board will be able to finalize rules and set up a licensing system by next summer – or possibly even by 2016. The state could base its MMJ regulations on the already-existing recreational structure, but it will take time to work all that out.
So unless Seattle policymakers really want to crack down on the MMJ industry, they may ultimately be forced to back down. At least for a while.
ATM Plug Pulled
This just isn’t fair.
Over the past two days, an estimated 1,000-1,600 dispensaries and recreational cannabis stores across the county lost their ATM accounts, including the “cashless” type many marijuana businesses use. Most businesses had little to no warning – the machines simply stopped working after their provider deactivated the account.
Sources close to the situation said that most of the accounts are tied to MetaBank, a major financial institution supporting ATM services. In January, MetaBank sent a letter to processors that provide these services, saying that it “cannot sponsor ATM terminals that are deployed in any business establishment that distributes marijuana.”
Nothing happened after that – until this week, when the crackdown began.
As if the industry didn’t have enough trouble taking payments from customers. Most shops can’t take credit cards, so offering ATM services – either the traditional kind or the cashless variety – is one of the only ways they can accommodate customers who arrive without money in hand.
Now, many dispensaries and rec stores don’t even have that option.
If they’re unable to find new providers, they could take a substantial financial hit. In some cases, patients and customers who arrive without cash – expecting to use their debit card with a cashless ATM – will simply leave. Others will find a new store or dispensary that offers ATM services.
A marijuana store in Denver said its sales dipped 30% one time in the past when its ATM service went down.
This is yet another reminder that although the industry has made solid progress over the past two years, it still faces many unique challenges – especially on the banking and payment-processing side of the equation.
Edibles Controversy Continues
Regulators in Colorado made national headlines when they openly discussed a potential ban on marijuana-infused edibles during a work session on Monday afternoon.
Though the suggestion was quickly retracted after a backlash from the cannabis community, the conversation over how to keep edibles out of the hands of children is far from over.
Add to that a recent campaign by the Denver Police Department warning parents to keep an eye out for edibles being given to children on Halloween next Friday, and it’s clear that edibles remain a flashpoint for those who oppose legal marijuana and view it as a danger to kids. (Marijuana proponents point out that it’s a simple problem to avoid – warn kids not to eat anything that’s already unwrapped or not easily recognizable as ordinary candy.)
During the work session on Monday, stakeholders discussed new possibilities for packaging rules, including the possibility of requiring companies to stamp warnings on edibles themselves.
Though no course of action was decided upon, it’s likely that the issue will be raised during the 2015 legislative session, and edibles manufacturers should probably brace themselves for more new rules.
In other words, it’ll probably be a long time before the issue of edibles regulations is settled.
The same scenario is likely to play out in other states that legalize marijuana, especially recreational. So expect to see similar wrangling over rules in Oregon and Alaska if voters in those states pass legalization initiatives next month.
John Schroyer and Chris Walsh contributed to this report