We have had some people asking, “What happened to the my ability to use Debit Cards at Lakewood Cannabis?  Did something break or something?”

Let me first say, it wasn’t us, it wasn’t our equipment and it wasn’t our idea and we’re working as quickly as we can to fix it.  Now for the explanation….

See, what’s happening here relates to the relationship between the Visa/Mastercard network and banks.  Banks are all about money as we all know.  The federal government has forbidden all banks insured through the FDIC from dealing with the Cannabis industry.  Many banks don’t like this rule, but it is what it is.

There is a “loophole” in the Visa network that we, as an industry, were exploiting to allow Debit cards to be used.  That loophole is that, with the right terminal, you can take a debit transaction out of your account using the VISA/Mastercard network at the time of purchase.  VISA/Mastercard was not a fan of this practice, and neither were the banks.  VISA considered it a misrepresentation because our terminals are not true debit machines, it’s a pin-pad on a Point-Of-Sale system that allows you to remove funds at the time of purchase.  It was a very gray area, that after it became very large and widely used was hard to ignore and VISA/Mastercard is very worried about running afoul of the federal government.

But why were the banks raising an uproar about it?  The banks were forbidden from the industry, but many banks have an “ATM Fee Reimbursement” policy.  This means that no matter where you use an ATM in America, they’ll reimburse you the fee that you incur from using an “out of network” ATM.  Well, this constitutes an “out of network” ATM and banks were thereby footing the bill for the usage of these terminals in our store.  They weren’t getting a benefit and only had money flowing out to pay these fees and could potentially run afoul of the bank regulators for “aiding and abetting” a transaction in Schedule 1 drugs.  Is that legit or an excuse?  I personally think it’s a reach, but remember a couple paragraphs ago I mentioned they are all about money, and then later mentioning they get nothing out of this and it’s costing them?  Their business model is predicated in part on your willingness to put your money in for their use and them giving you the absolute minimum they can give you for you to keep it there.

So now what?  Well, we’re working on a two pronged approach to resolve this.  One is that we are trying to get in an actual ATM solution on site.  The ATM does not belong to us, we are simply the location in which it resides.  This means that we can’t fill it, we can’t modify it or fix it as it is not our property.  The second solution is a new compliant PIN pad solution from our Point-Of-Sale company.  The ATM charges a flat fee for each transaction.  The PIN solution charges a percentage of the transaction as the fee.  From what I can surmise as of this writing, there will be a price that below which will benefit the patient to use one solution over the other.  So we’re working on a robust solution that should completely fit the bill.  What’s more, when the day comes that you can make actual credit card transactions in a medical cannabis store we will be in on the ground floor, day one.