 Federal banking and money laundering laws put restrictions on financial institutions, barring them from providing services like bank accounts, credit card processing, loans, and more, for the cannabis industry.
One work around many dispensaries have been using has been the so called, “cashless ATMs”, which are also known as “point of banking” systems. Purchases were either rounded up, often to multiples of $20, to make the transaction appear to be cash disbursements. Or, change from the transaction would be returned to the customer, and the dispensary would keep the rest to cover the payment for the purchase. Often times the transactions were processed with an address of a nearby business such as a fast food restaurant instead of the actual dispensary address, to further disguise what was really purchased. This method has been so popular that Curaleaf Holdings, one of the largest cannabis retailers in the United States, reported in April that approximately one-third of the company’s dispensary transactions were processed through cashless ATMs. Late last year, Visa sent a memo to retailers stating that it “was aware of a scheme where POS devices marketed as ‘Cashless ATMs’ are being deployed at merchant outlets.” And subsequently, begining in November, some of the biggest ATM transaction processors have started pulling the plug on these types of sales, according to unidentified sources cited by Bloomberg. It’s estimated that less than 20% of cashless ATMs are still operational, but probably not for long. This reverting to 100% cash raises the very real danger of robberies. One study of Washington state cannabis business robberies and burglaries (Compiled by the Seattle-based dispensary Uncle Ike’s as part of a novel tracking system, looking at years 2017 to 2022), found that nearly 100 Washington retail establishments were impacted over a period of less than five months. Some people have suggested that burglars are after the cannabis product itself, but, a report from David Borden of StoptheDrugWar.org shows that cash it the primary target, with very few cases of people just stealing cannabis. An executive summary said, “Our analysis confirms that cash dominates as the target for cannabis store robberies." More cash transactions and more robberies emphasize the imminent need for banking reform for cannabis now! Comments are closed.
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