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Workarounds emerging "When customers are made aware of our ability to comply
with FinCEN, and avoid the problems spelled out [by DOJ],
In addition to the dispensaries in Hawaii, CanPay has they tell us there is no alternative: we're it," said Medical
contracts with dozens of legal cannabis dispensaries Cannabis Payment Solutions CEO Jeremy Roberts. The
in California, Colorado, Florida, Maine, Oregon and company said it ultimately wants to provide an end-to-end
Washington. The company works with 20 financial cannabis business solution, not just support payments.
institutions, mostly community banks and credit unions,
through its closed-banking feedback loop. All rely on Huge potential, limited ISO/MLS opportunities
cannabis banking platforms designed to comply with the
FinCEN-DOJ guidance, Eide said. The market for legal sales of cannabis products (medicinal
oils, pot, cannabis-infused edibles, etc.) is huge and
In Hawaii, CanPay works with Safe Harbor Private growing. North American consumers spent $6.7 billion on
Banking, a unit of Partner Colorado Credit Union. The legal cannabis products in 2016, according to The Arcview
Arvada, Colo.-based credit union developed a platform to Group, a cannabis investment and market research firm.
bank cannabis businesses in compliance with the FinCEN- The website Marijuana Business Daily estimates total
DOJ guidance to serve customers in its home state. The annual demand for recreational cannabis in the United
Safe Harbor unit was launched in July 2017 to market the States exceeds $45 billion.
platform more widely.
In Colorado, retailers racked up a collective $1.02 billion
"We want to expand the cannabis program nationally and in sales of medical and recreational cannabis products
help other financial institutions solve the safety issue of during the first eight months of 2017, adding $162 million
the unbanked cannabis industry," said Safe Harbor CEO in taxes and fees to state coffers. California officials said
Sundie Seefried. As of July, Partner Colorado said it had they expect legal cannabis sales there to top $7.6 billion
deposited, validated, reported and monitored over $1 a year by 2020, adding an estimated $1 billion a year in
billion in sales from cannabis businesses in Colorado. revenues to state coffers. Arcview, meanwhile, forecasts a
27 percent combined annual growth rate in legal cannabis
Eide conceded CanPay's mobile debit app is not a perfect sales through 2021 when it expects legal pot shops in
solution. "It's as close to the experience of paying with the United States and Canada to collect $22.6 billion in
a credit or debit card as we can get without violating revenues.
any [government or card association] prohibitions," he
said. Should the federal government relieve cannabis of So are there opportunities for ISOs and MLSs to tap into
its Schedule 1 status, CanPay has the technologies and this revenue stream? Yes, but not many, and those that exist
processes in place to support all manner of retail cannabis may not be lucrative, or technically legal. "There are a lot
payments. of folks out there misrepresenting themselves," said one
MLS. This MLS, who asked not to be identified by name,
Wil Ralston, President of SinglePoint Inc. said his company said he considered working with offshore processors to
is similarly positioned. "We already have all the pieces in support cannabis dispensaries but was scared off by what
place to get a credit-debit card solution up and running," he saw as a lack of transparency.
Ralston said. In the meantime, Seattle-based SinglePoint
is test-driving SingleSeed Payments, a mobile solution for Assessing offshore options, Kolb said, "There are a lot
paying at cannabis dispensaries that uses a proprietary of wild cowboys out there." And Ralston pointed to the
bitcoin exchange. "We hope to start processing by mid- added cost of working with offshore processors, including
January," Ralston said. international transaction surcharges. "It's not something I
even suggest people do," he said.
A mobile technology company, SinglePoint has been
acquiring technologies and companies that eventually will Several experts believe the traditional ISO/MLS business
support a soup-to-nuts platform for cannabis businesses. model of making money by marking up the rates of
"The overall goal is to have a fully integrated solution for upstream partners doesn't work well in a market like
businesses to manage their day-to-day operations from cannabis, where risks are deemed high and costly. "It's
beginning to end," Ralston said. always going to be high risk," Ralston said. "They [cannabis
businesses] are still going to pay high rates."
Medical Cannabis Payment Solutions, based in Cheyenne,
Wyo., has another approach. It's readying a closed- Kolb agreed, stating, "There's really not much profitability
loop system for cannabis payments that customers can there when you start cutting into the pie."
access by card or mobile app and that abides by federal
guidance. The card/app can be funded with credit or debit
cards, through a checking account link or using bitcoins.
Participating dispensaries receive funds via ACH or wire
transfers.

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