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December 11, 2017 • Issue 17:12:01

Legal pot sales:

a multibillion-dollar market in limbo

cannabis dispensaries, even if it's legal in the jurisdictions
where they operate. The Federal Reserve can and has
rejected applications for interbank clearing accounts
for financial institutions that want to serve cannabis
businesses. And the card networks have said transactions
from cannabis retailers are off limits until federal law
deems otherwise.

"There's no way to overcome the clash of state and federal
laws at this point," said Massachusetts attorney Shanel
Lindsay. The uncertainty this creates "permeates every
aspect of the cannabis business," not just pot shops, she
added. Lindsay owns Ardent LLC, which sells a device for
creating pills or topical applications from raw cannabis.
Ardent's monthly receipts total about $70,000, Lindsay said,
and like Green Tiki, the business can't accept traditional
card payments. Lindsay also sits on an advisory board
By Patti Murphy commissioned by the state of Massachusetts to develop
policies and procedures for legal cannabis businesses
hristie Stanley is a business owner who would operating in the state.
seem a prime candidate for prospecting by
merchant level salespeople (MLSs). Located in "The potential for shut downs and loss of business is a
C a bustling strip mall in Kingston, Wash., her big risk for any bank to take on," said Dustin Eide, Chief
shop sees $60,000 to $80,000 in sales weekly. But Stanley Executive Officer of CanPay, a Colorado firm that provides
hasn't piqued the interests of many MLSs. Her shop, a mobile debit app for payment acceptance at cannabis
Green Tiki Cannabis, while legal under state law, is effec- dispensaries.
tively banned from accessing interbank payment systems
under federal law and card brand rules. All transactions
are in cash. Contributed articles inside by:

And Green Tiki is not alone. With sales of medicinal and/
or recreational cannabis products now legal in over two Heather Petersen ..................................................................................16
dozen states, thousands of cannabis shop owners can't Steven Feldshuh ...................................................................................32
get accounts with acquirers, leaving them awash with Anthony Ogden ....................................................................................36
cash that technically can't be deposited at banks or other Srii Srinivasan .........................................................................................38
federally insured financial institutions. Jeff Fortney .............................................................................................40

Marijuana and other cannabis products are illegal under
federal law – classified as a Schedule 1 narcotic on par TOC on page 3
with heroin. That means federal regulators can shut down
banks and credit unions that knowingly do business with
Continued on page 30