The news bombards us with frequent reminders of WA marijuana retailers getting robbed and burglarized. Pot shops up and down the I-5 corridor, from Bellingham to Vancouver, are increasingly becoming the target of armed robberies. And some of those robberies have even left employees with gunshot wounds.
One reason why pot shops are hit so often is that the businesses are cash-only. Because marijuana is federally illegal, federal law prohibits the stores from taking credit or debit card payments. Transactions in the U.S. involving the purchase or trade of marijuana are not permitted on credit card networks until federal law allows. As a result, credit card companies have distanced themselves from facilitating marijuana -based transactions.
Banking has been a sticking point for the legal cannabis industry for much of its existence. Even where legal, banks are often hesitant to get involved with cannabis businesses. That extends to cannabis credit card processing: a card network ban on cannabis transactions has locked state-legal THC licensees out of merchant processing services, preventing them from transacting with debit and credit cards.
Credit unions are also leery of marijuana transactions for many of the same reasons. The National Credit Union Association (NCUA) reports that under federal law and regulations, there are some “worst case scenarios” that may occur. First, a credit union could face criminal liability for banking a business that engages in a federally illegal activity, i.e., the sale of marijuana. Second, the NCUA could pull the credit union’s charter, thus, potentially leaving the credit union’s members temporarily without services and requiring that credit union to be absorbed into a different credit union.
Third, the NCUA could terminate the credit union’s share insurance account, which would force that credit union to find a private insurance provider. Fourth, the credit union could lose access to its Federal Reserve master account. And finally, should a credit union’s member(s) be prosecuted, their funds could be tied up in asset forfeiture proceedings, which could be labor-intensive and impact the credit union’s balance sheets.
My opinion? When cannabis becomes legal in the U.S. federally, all merchants — ecommerce and brick-and-mortar — can expect an explosion of legitimate payment providers. Until then, cash is king. And as such, unfortunately, marijuana retailers may continue to be victims of crime.
Please contact my office if you, a friend or family member are charged with a crime. Hiring an effective and competent defense attorney is the first and best step toward justice.
