Ohioâ€™s New Medical Marijuana Payment System is a Gamechanger
Published on 8/12/16
Here we go again with legislators trying to fix a problem caused by prohibition. Ohio is now the 26th state to legalize medical marijuana, but due to marijuana being federally illegal, most banks will not work with the industry, forcing them to use cash for everything from payroll and taxes to bills. Ohio legislators aren't comfortable with the large amounts of cash being kept inside marijuana businesses, and instead of fixing the problem federally, their short term solution is a closed-loop system. It would resemble that of a pre-paid debit card system where users will have to fill an account with money via check, credit card or cash at a state agency or state licensed liquor store. The number of banks working with marijuana businesses has risen from 51 in 2014 to 301 in 2016, but with most banks shunning the industry it remains a cash business. Until lawmakers are willing to protect banks from persecution or reschedule cannabis, then banks will stay fearful of marijuana and the federal government.
The state's proposal comes amid concerns with how money is handled at marijuana companies with almost all of them running with cash-only transactions. These companies turn around and use the cash to pay bills, taxes and their employees and are forced to keep the cash in unsafe places. This endangers employees and customers because most banks, credit unions and credit card companies are reluctant to do business with them because marijuana is still illegal under federal law.