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.

Banking On The Marijuana Industry?

OREGON: It is legal to sell marijuana in 23 states. But pot businesses can’t deposit their money in banks because of federal banking laws. While the dilemma has been a back-burner issue in Congress for several years, a solution may be in the works.

A provision in the upcoming financial services spending bill would prevent the federal government from spending money on penalizing financial institutions that accept legal marijuana businesses as clients. That would greatly reduce the ability of federal agencies’ to prosecute the banks.

Increased access to banking would, in turn, decrease the currently cash-only businesses’ risk of robbery by allowing customers to pay with debit and credit cards, reduce the likelihood that the business could be used as a money-laundering front and solve the nightmare of trying to pay taxes with cash

“Forcing businessmen and businesswomen who are operating legally under Oregon state law to shuttle around gym bags full of cash is an invitation to crime and malfeasance,” said Sen. Jeff Merkley, D-Ore. “It’s time to let banks serve these legal businesses without fearing devastating reprisals from the federal government.”

Federal Reserve Blocks ‘Marijuana Bank’ in Colorado

COLORADO: Marijuana-related businesses in Colorado are so profitable that the government doesn’t know what to do with all of the tax revenue they’re generating. But business owners face a more immediate problem: Where to stash their own profits when banks won’t take it.

Because marijuana is a federally banned Schedule I substance, most banks have been reluctant to accept deposits from industry businesses. A  clumsy and ambiguous set of guidelines from the federal government, which at least seemed to indicate that banks working with dispensaries operating legally under state law would be shielded from money laundering prosecution, didn’t help.

Now the Federal Reserve is muddying the waters further with a court filing against the Fourth Corner Credit Union, which was established specifically to handle Colorado’s marijuana cash, according to NBC News:

The credit union can’t open without clearance from the Federal Reserve, which said in its filing that “transporting or transmitting funds known to have derived from the distribution of marijuana is illegal…”

The Federal Reserve said in the latest filing that bankers won’t be led away in handcuffs for taking marijuana money, but they don’t have the right to put that money in the Federal Reserve system.

By pushing for approval from the Fed, it was “as if Colorado enacted a scheme to allow trade in endangered species or trade with North Korea,” the filing says.

State Seeks ‘Creative Ideas’ To Handle Cash From Alaska Pot Businesses

ALASKA: Struggling with the prospect of handling millions of dollars in cash from commercial marijuana businesses, Alaska’s Department of Revenue is holding three brainstorming sessions to get ideas for how to handle the influx of taxes in an industry shut off from basic banking practices.

 “It’s an uncharted territory. … We don’t have any precedent to go off of, really,” said Claire Lettow, regulations specialist for the state Tax Division.

Since marijuana remains illegal federally, Alaska’s financial institutions so far aren’t opening their doors to commercial businesses. That means, like other states that have legalized recreational marijuana, businesses will be dealing in cash. Potentially a lot of cash.

Alaska’s Department of Revenue estimates that it will take in between $5.1 million and $19.2 million in tax revenue from commercial marijuana in 2016.

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.