Miller Barondess Files Suit On Behalf Of FGPQ Against PayQwick And Its Executive Officers For Fraud

CALIFORNIA: The lawsuit, filed in Los Angeles County Superior Court, alleges that Defendants PayQwick and its executive team, consisting of CEO Keith Marks, President Kenneth Berke and CFO Albert Acevedo, defrauded Plaintiff FGPQ LLC.

Per the Complaint, PayQwick provides financial services to cash-based cannabis related businesses. PayQwick, through Keith Marks and Kenneth Berke, sought investment into the company from outside investors. Marks and Berke secured a significant investment from Plaintiff by making various representations relating to PayQwick’s ability to imminently facilitate credit and debit card processing services for its cannabis customers, which PayQwick promised would result in significant revenue to PayQwick beginning in the fourth quarter of 2017. The lawsuit alleges that these representations were intentionally false and misleading, as the company has still yet to launch these services to date and appears unable to do so.

According to the lawsuit, PayQwick, Berke and Marks also repeatedly violated the terms of the Investors Rights Agreement that governs Defendants’ relationship with Plaintiff. These breaches include providing themselves substantial raises, entering into predatory and self-serving contracts, and representing to Plaintiff and the public that they were in business lines that they were not in.

The Complaint further alleges that, consistent with their pattern of unethical behavior throughout the relationship, Defendants engaged in a scheme to defraud Plaintiff into subordinating its substantial investment in PayQwick. Defendants made repeated representations to Plaintiff that PayQwick had finalized an important financial relationship to induce Plaintiff to agree to subordinate its interest to a new investor. Shortly thereafter, Plaintiff discovered that, instead, this important financial relationship had been severed, threatening the financial viability of PayQwick. Defendants deliberately withheld this important information from Plaintiff.

The Complaint seeks damages from PayQwick and its officers in their individual capacity. In addition to compensatory damages, punitive damages and attorneys’ fees, Plaintiff seeks to rescind its initial investment into the company, and any consent to subordinate its interest in the company, as Plaintiff was induced to enter into these agreements by fraud and deceit.

GreenMed Launches Cryptocurrency-Based Credit Card Processing App For Legal Marijuana Industry

CALIFORNIA: Pro-cannabis cryptocurrency startup GreenMed has become the world’s first one-stop shop for electronic payments in the legal marijuana industry. The platform enables customers to pay for legal marijuana with credit and debit cards. Apart from allowing card payment at dispensaries, the platform also allows users to pre-purchase for quick pick-up over its app.

GreenMed is the first platform to implement an ERC20 Ethereum token-backed application for the convenience of both customers and legal marijuana dispensary operators. The platform uses cutting-edge electronic payment processing technology in conjunction with Ethereum blockchain to execute credit card transactions.

Due to strict federal regulations, banks have been unable to partner with legal marijuana dispensaries, leaving cryptocurrencies like Ethereum as one of the only options to help the $5 billion industry accept mainstream electronic payments like credit/debit cards and electronic fund transfers. They can also choose to pay with digital currencies.

While the GreenMed application allows patients to pay for their legal marijuana with credit cards and cryptocurrencies, merchants can be issued GreenMed debit cards which enable them to withdraw accumulated funds directly from any ATM. The GreenMed debit cards can also be used at PoS and online payment gateways to make purchases, just like any other debit card.

In addition to convenience, GreenMed also provides a secure option for legal marijuana dispensaries to handle their earnings. In the absence of such a solution, the dispensaries are forced to conduct all transactions in cash which not only increases the risk of theft but also cuts into the margins due to high operational costs involved in securing and transporting cash.

Cashing In On Cannabis: CannaCon’s Banking Panel

By Sahar Ayinehsazian

Since Washington state legalized recreational marijuana in 2014, recreational cannabis sales have totaled over $1 billion, translating to more than $250 million collected in new taxes. Such substantial sales, however, have also brought problems for licensees in the form of cash.

Because of marijuana’s federal status as a Schedule I substance, financial institutions continue to deny banking services to state licensed marijuana businesses. Consequently, these businesses have been forced to deal in cash and suffer the sometimes lethal consequences.

There are, however, licensed marijuana businesses who have broken free from cash with the help of third party platforms like PayQwick. Licensed marijuana businesses can now easily access regular businesses bank accounts, cash management and bill pay services and the ability to send and receive electronic payments. These businesses also enjoy the added benefit of compliance services, which keep them operating in line with all of the state’s regulations.

To learn how to break free from cash, marijuana business owners and those considering the marijuana industry can attend CannaCon’s banking panel, Cashing In On Cannabis – Compliance, Banking and Cash Management” on Friday, February 17, 2017 at 11:30 am in seminar room two. Moderated by MJBA CEO and Co-Founder David Rheins, the panel features industry experts Kenneth Berke, Christine Masse, John Vardaman and Myles Khan.

Ken Berke is the Co-Founder and CEO of PayQwick, a compliance, cash management and electronic payment processing platform that has facilitated regular business bank accounts for over 200 licensed marijuana businesses throughout Washington. He is also an attorney with 29 years of experience and has advocated for the legal marijuana industry before regulators throughout the U.S.

Christine Masse is a partner at Miller Nash Graham & Dunn, where she leads the government and regulatory affairs practice group and specializes in representing businesses in highly regulated industries with their transactional, regulatory, and public policy needs. She also leads the firm’s tribal team, providing counsel to various Northwest Native American tribes and organizations on matters such as marijuana.

Myles Harlow Kahn is a legal officer at Foundry Law. His practice focuses on corporate, entertainment, intellectual property, business development, cannabis and regulatory matters. He is also the owner of Buddy’s in Renton, one of Washington’s most prominent marijuana retailers.

John Vardaman is Executive Vice President & General Counsel of Hypur, makers of technology enabling financial institutions to service cash-intensive businesses in accordance with legal compliance requirements. He helped author the Cole Memorandum, the DOJ document outlining how financial institutions can bank marijuana businesses in states where cannabis has been legalized.

Mounting Support for Marijuana Banking Has Widespread Implications

DISTRICT OF COLUMBIA: Although 28 states have already legalized marijuana for medicinal or recreational use, the U.S. Drug Enforcement Administration (DEA) continues to label marijuana a Schedule 1 substance, along with heroin and LSD, making it illegal on a federal level. As a result, the banking industry has been slow to provide services to marijuana businesses, forcing many of these companies to operate on a cash-only basis.

Cash transaction businesses are a tempting target for thieves, and the lack of oversight at times leads to lost tax revenue. It’s a situation that Senator Elizabeth Warren, a member of the Senate Banking Committee, is anxious to change. As the Associated Press initially reported, Warren and nine other senators have called upon the Financial Crimes Enforcement Network to issue new and stronger guidance allowing banks to provide services to marijuana shop vendors. The moves are a significant encouragement to payment processors supporting the cannabis industry, as well as other industry players.

One of the supporters is Singlepoint, Inc. (OTC: SING), a mobile technology and payments provider, which, through its “SingleSeed” Payments subsidiary, provides payment solutions for the cannabis industry. Its mobile marketing and payment solutions include cashless ATM, Pay-by-Text™ and text message marketing. The company is strongly encouraged by the efforts of Senator Warren and others on Capitol Hill, and the significant positive changes they could bring.

Previous guidance efforts by the U.S. Department of the Treasury gave banks only limited permission to work with legal marijuana businesses. Along with the DEA’s Schedule 1 listing, it has created a significant gap between state and federal treatment of marijuana. Even though the number of financial institutions willing to provide services to marijuana businesses has grown significantly in recent years, only a small percentage currently serve the industry. It’s still an area dominated by small state-chartered banks and credit unions.

Supporters however see an inevitable day, through efforts such as those now being led by Senator Warren, when large national banks like Wells Fargo offer comprehensive services to the cannabis industry, further spurring already rapid industry growth.

Big NY Banks Tell Licensed Medical Marijuana Firms To Take a Hike

NEW YORK: Some of the major federally regulated banks in New York have no plans to do business with the medical marijuana companies that were awarded licenses to grow and distribute the drug.

That means the banks will not accept deposits from the companies and will not allow bank-issued debit cards to be used to purchase the drug.

“While the use of medical marijuana is legal under applicable state laws in some states, the manufacture, distribution, and use of marijuana is still illegal under federal law,” a spokesman for Wells Fargo said. “Our policy of not banking marijuana-related businesses is based on applicable federal laws.”

Cannabis 101: Juicing

By Sue Vorenberg
Cannabis Daily Record

WASHINGTON:  Juicing is a growing trend in the health food community – and an excellent way to add more fruits and veggies into your diet in a concentrated form.

(cannabis leaves)

But there’s one added ingredient that, while somewhat difficult to get, can add even more healthy bang to your juice: Cannabis leaves (the parts of the plant that typically end up on the grow room floor or being recycled as mulch on a farm).

“Raw cannabis juice is the most nutritious fuel in the world, even when you put it up against something like kale,” said Farmer Tom Lauerman, a medical marijuana grower and activist in Vancouver, Washington. “It’s just loaded with everything.”

Cannabis juicing is becoming more popular in the medical marijuana community. It provides a wide array of vitamins and green nutrients, doesn’t get you high and it’s great as an anti-inflammatory, digestive aid and also helps with anxiety, said Pam Dyer, who runs the Twice Baked in Washington medical site and is a member of the Marijuana Business Association.

Pot Risk Vs. Profit: Bankers Cautious Of Marijuana Dispensaries

COLORADO: Every month, Jamie Perino hires a security detail to come to her three recreational marijuana dispensaries. They stop by, collect thousands of dollars in cash and head out to deliver the money to the state, county and city.

Perino, the CEO of Euflora dispensaries, said she can’t find a bank that will work with her. She pays her employees and her landlord in cash. She can only accept cash from customers. She must even pay her taxes in cash.

“I can’t bank my money,” she said. “It’s really frustrating. … When I go to pay my federal taxes, you get a 10 percent penalty for paying in cash, but we can’t have a bank account. So it’s just a big Catch-22.”

Pot Industry’s Bank Bid Rejected By Federal Regulators

COLORADO:  The Fourth Corner Credit Union is not allowed to accept any marijuana business until they get federally insured.

And this is the more reason the credit union is asking for equal access to the financial system so that marijuana businesses could operate without restrictions, because they are now at a disadvantage.

According to the Denver Post, the Fed’s rejection is the latest denial in a string of roadblocks which included the National Credit Union Administration’s denial of Fourth Corner’s application for deposit insurance. Some 400 financial institutions have filed thousands of marijuana-related reports with federal banking regulators in compliance with last year’s guidance. Therefore, the story said, federal concessions to requests like the one from Fourth Corner are few and far between.

As Colorado legalized marijuana for recreational and medical use, the substance remains illegal at the federal level.

Despite Federal Law, Colorado Pot Shops Are Accepting Credit Cards

COLORADO:  While the cannabis industry has been touted as a “cash-only” enterprise since medical marijuana was first legalized in California nearly 20 years ago, recent reports indicate that the recreational sector has become fed up with handling massive stacks of cash and have since established a clever method for accepting credit cards payments.

Colorado pot shops have struggled for the larger part of the past year to adhere to federal statutes in an attempt to avoid provoking the DEA from sending in a team to shut them down. Part of this challenge has been conducting legal pot sales, which generate about $14 million per month, without the use of financial institutions.

Even though former U.S. Attorney General Eric Holder devised a set of rules in 2014 that would supposedly allow banks to work with marijuana businesses without the risk of prosecution, there have not been many willing to take a chance on these threatening endeavors because no changes to federal policy have been set in stone. Marijuana remains listed a Schedule I drug under the Controlled Substances Act, which has prevented retail pot shops and banks from getting into bed together. It seems that no one is interested in being sent to prison for money laundering.

 

Rising Marijuana Sales Leave Pot Shops Flush With Cash They Can’t Deposit

OREGON:  Two months from now, on July 1, Oregon will become the fourth state to allow residents to legally purchase marijuana for recreational use. In anticipation of legalization, the governing body that will oversee marijuana licensing and sales is preparing for something unexpected: A huge influx of cold, hard cash.

Legal marijuana in states like Colorado and Washington have surpassed revenue expectations in their first few years. But when marijuana businesses try to pay their taxes, the federal law that makes marijuana illegal limits their access to financial institutions.

Despite assurances from the Treasury Department that they would not be prosecuted, banks have been reluctant to open accounts for weed-related businesses. Some banks that accept money generated by marijuana sales fear that they may leave themselves open to federal money-laundering charges.