Katelyn Baker
Well-Known Member
Colubus, Ohio - Ohio could be the first medical marijuana state to fix the industry's cash-only situation.
Half the states and the District of Columbia have legalized medical marijuana but the federal government still considers it among the most dangerous drugs. Banks, credit unions and credit card companies are reluctant to provide services to legal marijuana businesses because of uncertainty from federal regulators, leaving most businesses to operate as cash-only.
Ohio's new medical marijuana law proposes a new way around the bank problem. The law allows state officials to set up a "closed loop" payment processing system, similar to prepaid debit and gift cards.
Sen. Bill Coley, who proposed that part of the law, said it will alleviate security concerns associated with securing and transporting large amounts of cash and prevent illegal drug suppliers from abusing Ohio's program.
The Southwest Ohio Republican told attendees at a medical marijuana conference here Thursday that state officials are already working on such a system ahead of the law's Sept. 8 effective date.
Here's how he sees it working:
"If you want privacy in this business the state of Ohio, go to Illinois because you don't get that in the state of Ohio," Coley told a crowd that included marijuana business owners, hopeful entrepreneurs and lobbyists. "You have no rights to do this in the state of Ohio except for the rights that the General Assembly gives you to do this in the state of Ohio."
The Department of Commerce, which is authorized to establish a payment system, is looking into the idea but has not made any decisions, spokeswoman Kerry Francis said.
Industry experts have doubts
Several technology companies have announced closed-loop payment systems in the past few years. Taylor West, deputy director of the National Cannabis Industry Association, said the systems are not yet common among marijuana businesses.
West said Congress will likely act in the next two years on legislation reforming banking regulations.
Cannabis consultant Heather Molloy said the cash-less system sounds interesting but risks becoming a "black hole" in Ohio's medical marijuana system.
"Can it ever be implemented properly if they're not going to use known technology from a known provider? Or does this become a perpetual waiting game, where you're waiting for the closed-loop system in order to have the rest of the program come into place?" Molloy said.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Cashless Payment System Proposed For Ohio Medical Marijuana Program
Author: Jackie Borchardt
Contact: Cleveland Ohio Local News
Photo Credit: Elaine Thompson
Website: Cleveland Ohio Local News
Half the states and the District of Columbia have legalized medical marijuana but the federal government still considers it among the most dangerous drugs. Banks, credit unions and credit card companies are reluctant to provide services to legal marijuana businesses because of uncertainty from federal regulators, leaving most businesses to operate as cash-only.
Ohio's new medical marijuana law proposes a new way around the bank problem. The law allows state officials to set up a "closed loop" payment processing system, similar to prepaid debit and gift cards.
Sen. Bill Coley, who proposed that part of the law, said it will alleviate security concerns associated with securing and transporting large amounts of cash and prevent illegal drug suppliers from abusing Ohio's program.
The Southwest Ohio Republican told attendees at a medical marijuana conference here Thursday that state officials are already working on such a system ahead of the law's Sept. 8 effective date.
Here's how he sees it working:
- Patients and registered caregivers would add money to their accounts by check, credit card or cash at a state-licensed liquor store, deputy registrar or other state agency that takes payments.
- Money in the accounts could be used to buy marijuana at dispensaries.
- Dispensaries, processors, testing labs and cultivators would also have accounts on the system. Businesses would buy products and pay bills through the accounts.
- If a business wants to pay an entity outside of the closed loop system, the state would cut a check to the payee.
"If you want privacy in this business the state of Ohio, go to Illinois because you don't get that in the state of Ohio," Coley told a crowd that included marijuana business owners, hopeful entrepreneurs and lobbyists. "You have no rights to do this in the state of Ohio except for the rights that the General Assembly gives you to do this in the state of Ohio."
The Department of Commerce, which is authorized to establish a payment system, is looking into the idea but has not made any decisions, spokeswoman Kerry Francis said.
Industry experts have doubts
Several technology companies have announced closed-loop payment systems in the past few years. Taylor West, deputy director of the National Cannabis Industry Association, said the systems are not yet common among marijuana businesses.
West said Congress will likely act in the next two years on legislation reforming banking regulations.
Cannabis consultant Heather Molloy said the cash-less system sounds interesting but risks becoming a "black hole" in Ohio's medical marijuana system.
"Can it ever be implemented properly if they're not going to use known technology from a known provider? Or does this become a perpetual waiting game, where you're waiting for the closed-loop system in order to have the rest of the program come into place?" Molloy said.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Cashless Payment System Proposed For Ohio Medical Marijuana Program
Author: Jackie Borchardt
Contact: Cleveland Ohio Local News
Photo Credit: Elaine Thompson
Website: Cleveland Ohio Local News
