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Thread: Hawaii Was Slow To Roll Out Medical Marijuana, But Fast To Go Cashless

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    Hawaii Was Slow To Roll Out Medical Marijuana, But Fast To Go Cashless

    Hawaii has decided to turn its medical marijuana program into a cashless payment system in the hopes of avoiding the problems that other states and businesses have faced when dealing large sums of cash. The goal is that by October 1, all of Hawaii’s licensed dispensaries will no longer use cash, but instead ask their customers to pay with a debit payment app.

    Governor David Ige said at a press conference on Tuesday, “Cannabis is illegal at the federal level, still a schedule one controlled substance. Because of this, all financial institutions in Hawaii have decided against providing banking services to the dispensaries. This solution allows the dispensaries to be able to write checks, to do all of the normal financial transactions that most businesses would do.” Hawaii legalized medical marijuana in 2000, but only recently implemented its program.

    Banking has been tremendously difficult for cannabis companies. The major banks refuse to work with these businesses because marijuana is still federally illegal. The major credit card companies have also turned their backs on customers wanting to use their bank cards to engage in such transactions. This has caused inconvenience for the customers who are forced to pay with cash and the dispensaries that end up with stacks of cash that needs to be processed.

    “The arrival of banking and payment services for the cannabis industry in Hawaii will enable dispensaries to reduce or eliminate cash sales, which will help keep these businesses much more secure,” said Kerry Komatsubara, Executive Director of the Hawaiian Educational Association for Therapeutic Healthcare. “The cash-only precedent in this industry is less than ideal for customers, employees, and the general community, so having alternative options available really does change how we do business for the better.”

    The debit app called CanPay steps in to provide an alternative to cash-only transactions. It is partnered with Safe Harbor Private Banking, a Denver-based division of partner Colorado Credit Union, which is a leading compliant banking program that specializes in working with cannabis companies.

    “Removing cash from the equation leads to a more transparent and legitimate way to do business that’s both convenient and secure for all involved,” said Dustin Eide, CEO of CanPay. “Through the lengthy collaboration between ourselves, Safe Harbor, and the tremendous individuals in Hawaii’s legal cannabis market, these dispensaries are now able to operate as closely as possible to businesses in any other industry.”

    While the cash has been a problem for some customers and businesses, there are many who prefer to keep these transactions in cash. Concerns over government intrusion and general privacy have kept these consumers wary of a system that can track all cannabis purchases. Dispensaries will still be able to accept cash transactions, although they will encourage customers to use the cashless system. Patients that don’t have a smart phone to use the CanPay system can set up an account with their email and log into a computer at the dispensary to complete a transaction.

    People are becoming more accustomed to cashless transactions in general. According to a study by the Federal Reserve of San Francisco, 32% of consumer transactions in 2015 were made with cash, compared with 40% in 2012. Still, 32% of transactions are handled in cash versus 27% for debit cards.

    There also remains the concern about Attorney General Jeff Sessions who has made it clear he would like to rescind the previous administration's memos regarding legalized marijuana and its banking. While Sessions has not been successful, there has been very little progress in Congress with regards to resolving the marijuana issue with states that have legalized it.

    Also, while Hawaii may have solved the problem of armored trucks and extra security personnel to oversee stacks of cash, it is also exposing itself to hacking. By depending on one system, the state could leave itself open to hackers who could take the system down and potentially keep patients from buying medicine. However, since cash will still be allowed, hackers wouldn’t completely freeze the industry.

    "Hawaii’s adoption of a cashless payment system for cannabis sales is a clever and legitimate workaround occasioned by the unfortunate reality of the banking challenges in the industry," said Bryan Meltzer, a partner at legal firm Feuerstein Kulick. "We have said for a long time that this has created a dangerous situation ripe for robberies and related criminal activity. Hawaii should be applauded for its out-of-the-box thinking."



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    Full Article: https://www.forbes.com/sites/debrabo.../#1f76dc7f1c63
    Author: Debra Borchardt
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    Website: https://www.forbes.com/#22284ed22254
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    Re: Hawaii Was Slow To Roll Out Medical Marijuana, But Fast To Go Cashless

    Sessions must go!!

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