For Some Legal Weed Businesses, Cryptocurrency Actually Makes Sense
Despite being recreationally legal in 10 states, cannabis businesses have to come up with creative ways to accept payment other than cash.
Legal cannabis shops have a problem: financial institutions in the US still aren’t eager to play nice with an industry whose product remains federally illegal, even though it’s been legalized for recreational use in 10 states.
For dispensaries in these legal markets, finding a local credit union willing to take on cannabis customers is often the only option. Otherwise, opening a bank account is difficult, and credit card companies are also wary of the burgeoning weed industry—meaning cannabis businesses are often left without a legitimate bank account or the ability to accept credit card transactions.
That means handling cash. A lot of it. And cash causes problems.
“Marijuana-related businesses are drowning in cash, literally piles of cash,” Steve Schain, a banking and cannabis lawyer at Hoban Law Group in Pennsylvania (where medical pot is legal, but not for recreational use), told Motherboard. “It creates security problems, it’s not insured, and if lightning were to strike a dispensary it would all be gone. You’ve got to pay your vendors in cash, your utilities in cash, and it’s a real pain in the neck.”