How to Navigate Payments in an Industry That Lacks Banking


2016 was a monumental year for marijuana, as voters and regulators throughout the U.S., including those in Arkansas, North Dakota, Florida, California, Nevada, Maine, and Massachusetts, legalized medical or adult recreational marijuana use.

Through comprehensive regulations, marijuana-tolerant states have allowed cannabis businesses to emerge from shadowy corners into licensed and well-lit storefronts. These businesses have shaped a robust industry, which, although profitable, lacks access to banking. To address these needs, PayQwick, Inc., a federally registered money services business and licensed money transmitter in Washington and Oregon, has been facilitating cashless transactions and business bank accounts for licensed marijuana businesses. In turn, PayQwick has gained insight into how these businesses can operate efficiently and avoid the traps that threaten the unwary.



Getting and keeping a state license to operate a cannabis business is an expensive and time-consuming process requiring meticulous compliance with federal and state laws. Of particular importance are the eight enforcement priorities listed in Deputy Attorney General James M. Cole’s 2014 memorandum titled “Guidance Regarding Marijuana Enforcement” and each state’s marijuana regulations. Compliance failures could result in penalties ranging from fines to licensure loss and criminal prosecution. In states like Washington, which uses a lottery system to grant a finite number of licenses, licensure loss can mean permanent exclusion from the marijuana industry.

Compliance also is the key to getting and keeping a business bank account. Although larger national banks do not yet serve marijuana businesses, smaller community banks have begun to accommodate the marijuana industry. Developing lasting and successful banking relationships requires marijuana businesses to remain honest, transparent and compliant, and to keep themselves abreast of all changes to local marijuana regulations. Further, marijuana businesses should not use crypto-currency in any form. Crypto-currencies, like Bitcoin, facilitate money laundering and tax evasion, which can lead to criminal penalties for marijuana businesses and their banks.

Remaining compliant can also mean the difference between life and death. Marijuana businesses are frighteningly familiar with the risks of a cash-dependent industry. To mitigate these risks, most premise-centered marijuana regulations require secure doors, locks, and state-of-the-art surveillance systems. Although compliance can be costly, marijuana businesses that have survived potentially deadly break-ins can attest to its importance. Recently, because of its compliant surveillance system, one Washington State retailer spotted a robbery in-progress and alerted the police before anyone was hurt.


Modern marijuana consumers want a convenient way to pay for cannabis, since cash is an expensive hassle for most. Re-loadable cards and smartphone apps are amongst the most convenient consumer payment methods, because they allow consumers to concentrate on what to buy instead of how to pay for it. Further, consumers can set a marijuana budget with re-loadable cards and smartphone apps, which is especially important for chronically ill and cannabis-reliant patients. Consequently, dispensaries and retailers that allow consumers to pay with re-loadable cards and smartphone apps successfully cultivate a loyal and growing customer base.

To provide consumer-centered cash alternatives, various companies advertise methods that allow consumers to pay dispensaries and retailers with debit/credit cards. Though these methods seem like sound solutions, dispensary and retail owners must carefully consider the legality and potential ramifications of their use. Business owners should be especially cautious of machines that allow consumers to use their debit/credit cards to pay for cannabis with crypto-currency, because crypto-currency triggers red flags for banks and regulators. Further, because marijuana is a Schedule I substance, it does not have a merchant category code. Therefore, dispensaries and retailers must never conduct debit/credit cards sales by miscoding transactions to reflect sales of a different good or service.


Working efficiently with ancillary businesses, including landlords, attorneys and accountants, is a crucial part of a marijuana business’s success. A key to efficient businesses-to-business relationships is eliminating cash and using quicker and more secure payment methods. Online payment platforms are among the fastest and most secure means for marijuana businesses to send and receive payments. These platforms transform the payment process from gathering and delivering bundles of cash to simply clicking a button.

Online bill pay is another cash-free payment method that allows marijuana businesses to instruct a third party to mail a check for them. Bill pay is especially helpful for marijuana businesses that lack a business bank account.


Obtaining a license and operating a marijuana business is a complicated endeavor. Retaining the right advisers, including attorneys and CPAs, can mean the difference between success and failure. While attorneys can help cannabis businesses keep up with cannabis-specific regulations, business owners must educate themselves about all issues affecting their business, like whether to structure a business as an LLC, a partnership, or a corporation. Consequently, cannabis business owners should not wait until a problem arises to seek legal advice or limit the advice they seek for cannabis-specific issues. Further, when seeking counsel, marijuana businesses should thoroughly research advisers before retaining them.

As states throughout the nation open their minds and economies to marijuana, those in the industry have the chance to profit immensely. To ensure lasting success, cannabis businesses must remain compliant, operate efficiently by simplifying transactions among themselves and their consumers, and seek advice from qualified and experienced advisers.

Kenneth J. Berke is the Co-Founder of PayQwick, Inc. Sahar Ayinehsazian is director of regulatory and governmental affairs for PayQwick, Inc.