Opinion: For a Successful Economy and Payments Ecosystem, Cannabis Merchants Must Be Afforded Resources to Conduct Business the Right Way

 Heather (Petersen) Altepeter, ETA CPP

Remember when you were a kid and wanted to make breakfast, but didn’t have the know-how to do so successfully? As a result, you wound up making a mess with runny eggs, burnt toast and overfilled bowls of cereal.

Now, think back to when someone finally showed you how to whisk eggs and cook them properly on the stove without burning your house down. It was revolutionary, right?

Payment processing in the cannabis space is just as revolutionary, but unfortunately, not quite as simple.

Currently, more than 30 states and Washington, D.C. have legalized marijuana (cannabis) and/or marijuana-based products for various purposes. Unfortunately, however, this legalization conflicts with federal laws, which still cite cannabis as a Schedule 1 drug under the Controlled Substances Act (CSA). In the banking world, federal law trumps state laws – making it illegal for banks to work with merchants in this particular vertical. As a result, cannabis sales declared legal by states are transacted in cash.

Can you imagine being a business owner with a garage full of unprotected cash and the inability to make large purchases the legitimate way? For many cannabis merchants, that scenario is their reality.

Fortunately, however, a bipartisan bill known as the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, was recently introduced to allow legal cannabis businesses to secure merchant accounts at financial institutions in states that have legalized marijuana.

Although National Merchants Association (NMA) does not have a stance on cannabis or marijuana as a whole, our company does support the STATES Act.

ETA members advocating for a better payments ecosystem during 2018 Capitol Hill Fly-in. (Photo credit: Electronic Transactions Association)

We voiced this support while simultaneously advocating for all merchants earlier this month when – as part of our national and international business tour – we visited Capitol Hill for the Electronic Transactions Association’s (ETA) Annual advocacy Fly-In. While on Capitol Hill, we spoke with legislators about the importance of the STATES Act and its impact on businesses, business owners and our nation as a whole.

Why, you ask? It’s simple.

As a leading merchant services provider and advocate, it is our job and responsibility to ensure that we are empowering businesses – of all types – to succeed and do business the right way. This can’t be done without legitimate financial accounts. Without banks behind them, cannabis businesses not only impact the payments ecosystem, but the economy, as well.

Think about it. There are thousands of cannabis businesses in the United States alone. Each business rakes in ample revenue. However, if they’re only able to accept cash, that’s all they have – subsequently meaning that their employees are paid in cash, transactions may not be reported appropriately, and money doesn’t circulate back into the economy.

Without the STATES Act, everyone loses. But with the STATES Act, we have the opportunity to build a better payments ecosystem, industry and country by untying the hands of merchants. Through the STATES Act, we will:

  • Resolve conflicts between state and federal laws by granting legitimate cannabis companies access to the financial system in marijuana-legalized states.
  • Protect payment processors by clearly outlining that compliant transactions are not – and should not – be considered trafficking.

Regardless of where you stand on Cannabis, its use and its legalization, one fact remains clear – it’s here, and it’s here to stay.

Now, we have to do our part to integrate this robust, albeit controversial, new industry into the business world the right way, while simultaneously taking advantage of all it has to offer.

NMA will continue to advocate for legal businesses of all types. Additionally, in an effort to support the historically marginalized cannabis industry, we will continue to support the STATES Act to ensure that all businesses have the opportunity to experience business and/or High Risk Done Right®.

NMA Works For You™ and will continue to stand in solidarity and advocacy with all merchants.