Cannabis Industry White Papers
In-depth analysis pieces on the cannabis industry, regulation, legalization, and technological resources. Learn more about how this sector is evolving.
Author: Matt Brown
The cannabis industry, currently worth 6 billion dollars and projected to reach up to 50 billion dollars over the next decade, suffers from a desperate lack of adequate financial services. While banking services are available in most states that have legalized marijuana, a major problem for cannabis businesses is finding legal, compliant, and stable services for handling electronic payments. This forces these businesses to operate primarily with cash, which entails significant security risks and raises costs for both the businesses and the banks that they use.
In this document we first examine the legal and regulatory framework under which the federal government permits cannabis products to be sold and the roles and risks of providers of financial services within it. We then explore what specific options are available to cannabis businesses for accepting electronic payments. We discuss how electronic payment processing systems work, including services that handle credit and debit card transactions and online closed-loop electronic payment services, and analyze their legality, compliance, and appropriateness for use in the cannabis industry from a regulatory point of view...OPEN
The foundation of cannabis’s illegal status is its classification as a Schedule 1 prohibited substance under the U.S. Controlled Substances Act of 1970. Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. The first step towards any legalization would likely be the rescheduling of cannabis as a Schedule II or III drug, with the resulting regulatory changes...OPEN