Since opening its doors last week, Colorado’s legal marijuana trade has been operating with a distinct similarity to that of the Black Market; in which buying weed is still very much a cash only business. This is because most financial intuitions have simply refused to allow marijuana enthusiasts to finance their quest for a buzz using the convenience of credit cards.
However, a recent report in the Wall Street Journal indicates that many of Colorado’s weed slingers have bypassed the bureaucratic fine print of Visa and MasterCard’s anti-weed regulations and are now swiping plastic for pot sales -- mostly because these financial institutions have not given pot retailers any reason to believe they are actually concerned about the issue.
In fact, a statement issued by Visa in regards to this matter suggests that while the company does comply with federal law and works diligently to prohibit illegal activity from taking place on its processing networks, “our local merchant acquirers are best suited to make any determination about potential illegality." That means if a pot shop owner considers it a legal transaction, the credit card company has no immediate reason to enter into a dispute.
Banking experts say that most credit card companies will not likely enforce policies that pertain to the legalized marijuana trade, not as long as the federal government continues to respect state laws and not make a prosecutor’s wet dream out of the situation -- which is also not likely.
The same experts say that the Justice Department is currently in the process of extending an olive branch to the banking industry by drafting legal guidelines to assist them in working with members of the newly legalized marijuana trade.
However, until those rules are spelled out, some credit card companies, like American Express, are taking their policies on marijuana dealings very seriously -- blocking transactions from businesses associated with marijuana sales. "We monitor websites to help make sure that the policy is being enforced," said an AmEx representative.
Nevertheless, like stoners, the cannaprenuer will always find a way. Some retail pot shops are reportedly sneaking passed the snarling watchdogs of the credit card companies by giving their products clandestine names in the system. Others are using a little clever ingenuity to log transactions as harmless withdrawals from an ATM using a Point of Banking system, which allows consumers to buy weed using debit cards.
"It's like when salmon can't swim in one direction, they'll figure out another way to go up the river," says Chris Mills, who assists dispensaries in setting up POB systems through his company, GreenHouse Payment Solutions.
Ultimately, recreational marijuana sales could end up being big business for the credit card companies. Many reports speculate that Colorado generated $1 million in marijuana sales on New Year’s Day alone.
Mike Adams writes for stoners and smut enthusiasts in High Times, Playboy’s The Smoking Jacket and Hustler Magazine. You can follow him on Twitter @adamssoup and on Facebook/mikeadams73.