Marijuana Gift Cards

Posted By: kw004h

Marijuana Gift Cards - 04/08/15 01:39 PM

Interesting.....

Tommy Chong’s solution for pot’s banking problem http://finance.yahoo.com/news/tommy-chong-s-solution-for-pot-s-banking-problem-163016679.html Tommy Chong is putting his name on a loyalty and payments card.

..."Chong’s workaround has him partnering with a merchant services company that treats the cards like gift cards instead of credit cards, thus placing them outside the purview of banking regulators. The company, Cannabis Merchant Financial Solutions, is part of FastFunds Financial Corporation, whose shares are traded over-the-counter."

Will the logo be Sister Mary Elephant?
Posted By: edAudit

Re: Marijuana Gift Cards - 04/08/15 01:44 PM


Tommy has been sampling the product way too long.

If banks will not bank them due to violation of federal law. the cash issue (monitoring) is just in addition to the violation of federal law.
Posted By: thomasj

Re: Marijuana Gift Cards - 04/08/15 05:32 PM

Reading the article, it says that the cards must be loaded/reloaded (no pun intended) with cash at a participating dispensary. I am not clear how this solves the dispensary's cash problem. I also found it funny that on the Fast Funds website they have a statement that none of their activities violate federal law. I think that is open for debate - providing ancillary services to assist in the movement of funds related to the purchase/sale of a product that is still illegal in the eyes of the federal government?
Posted By: kw004h

Re: Marijuana Gift Cards - 04/08/15 05:45 PM

Here's my take: Having large quantities of cash is a security problem for the marijuana businesses. If retailers start incentivizing their patrons to load up a "green card" at certain dispensaries acting as the cash funnels, so to speak, then the cash is centralized, making the logistics of storing/moving/ placement laugh easier.

Plus, retailers who may have been interested in sales of other things besides marijuana can accept payment for those things via the traditional merchant services processors, and accept payment for marijuana products through the stored value cards. Perhaps they (FastFunds and company) believe that more retailers would be interested in offering kmarijuana products if they didn't have to deal directly with the cash and its associated headaches.
Posted By: edAudit

Re: Marijuana Gift Cards - 04/08/15 05:53 PM

if a bank is not going to accept payment in cash what makes them thing that an ACH from illegal activity is better?
Posted By: ACBbank

Re: Marijuana Gift Cards - 04/08/15 06:13 PM

Originally Posted By edAudit
if a bank is not going to accept payment in cash what makes them thing that an ACH from illegal activity is better?


My thoughts exactly. Maybe I don't understand the flow of funds, but at the end of the day, the source of funds is still the sale of a federally illegal narcotic. Any bank that does adequate DD is not going to want to deal with the brain damage.
Posted By: kw004h

Re: Marijuana Gift Cards - 04/09/15 05:54 PM

Oh, without doubt. I think the sidestep that FastFunds is hoping for is that it is a third party payment processsor. Third party payment processors are not federally regulated, and gift cards are not credit cards. Third party regulators can process "gift card" transactions outside of the bank.

Clearly, this line of reasoning breaks down when FastFunds tries to have a bank account, and a bank does due diligence to see who FastFunds' customers are and what FastFunds' transactions are. Who knows, maybe there is a bank out there with a sufficient risk appetite to take on that activity.
Posted By: Princess Romeo

Re: Marijuana Gift Cards - 04/09/15 07:11 PM

Or a small credit union in Florida....

whistle
Posted By: BetsyS

Re: Marijuana Gift Cards - 04/10/15 01:22 AM

So in essence by depositing the cash in their account instead, FastFunds is adding a layer between the marijuana business and the bank?

Hmmmm, kind of sounds a lot like money laundering...
Posted By: edAudit

Re: Marijuana Gift Cards - 04/10/15 10:53 AM

so not worry they will be a C$D or a CMP for FastFunds in a few years.