Articles Tagged with cannabis banking

Two cannabis delivery companies – one Californian, one Canadian – are facing off in a San Francisco civil lawsuit involving customer payment processing fraud. The Toronto-based firm is accusing the other of carving an unfair market advantage by using European shell companies to illegally processing customer payments via credit or debit card.cannabis credit card processing

By processing both debit and credit card payments from customers through its online platforms, plaintiff alleges its biggest cannabis services competitor committed wire and bank fraud. A spokesman for the stateside company called these allegations, “false.”

As longtime Southern California marijuana lawyers, we recognize that in any other industry with any other product – this would not be an issue. Unfair business practices lawsuits crop up fairly often enough, but most competitors aren’t concerned with how each other’s payments are processed. Cannabis commerce is the only place we see this because of the labyrinth of laws varying. It starts with the statutes in 34 states plus Washington, D.C. that directly conflict with federal classification of the drug and only gets more confusing from there. Continue reading

Federal banking regulations have made the operation of a cannabis business both a complicated and dangerous proposition. Because cannabis is still classified as a Schedule I drug under federal law, any transactions made at a cannabis business operating lawfully under state law are, nonetheless, considered illegal drug money under federal law. This is a problem for banking institutions, because they are subject to federal law and banking regulations. Most cannabis businesses have no alternative other than to operate exclusively in cash. Continue reading