Overcoming Discrimination: Merchant Services for the MMJ Industry

The medical marijuana (MMJ) industry has long been embattled, struggling for its survival despite the fact that it is perfectly legal in 23 States and the District of Columbia. How did this happen? The federal government refused to recognize marijuana dispensaries as legal operations under federal law, creating a mess of inconsistent laws and messages around businesses providing legal marijuana. In addition to this failure on the part of the federal government giving rise to the constant threat of raids and civil asset forfeiture, medical marijuana dispensaries also became the victims of heavily biased payment blockades and the outright refusal of banking services, meaning that as a legal marijuana dispensary, it became nearly impossible to attain merchant services.

Global Merchant Solutions knows the compounded effect of the aforementioned state law-federal law conflict has allowed the major payment associations and large credit card processors to unfairly shun the entire merchant category, basically forbidding MMJ merchant services. American Express and Discover both announced separately that they would adhere to federal law when it comes to MMJ dispensaries, thereby ignoring the dispensaries’ legal status in 23 states. VISA and MasterCard transactions are usually processed by what are called “acquiring processors,” who also have an overwhelming tendency to bias things in favor of federal law.

Electronic Merchant Systems (EMS), for example, outright stated their position against MMJ Merchant Services, saying in 2012:

 “In light of recent developments, we wanted to reach out and make you all aware of the latest news regarding Medical Marijuana merchants. Effective July 1st, 2012, MMJ merchants will no longer be able to accept Visa or MasterCard credit or debit cards.”

Amazingly, even bitcoin’s processor, U.S.-based BitPay, has refused to stand up for MMJ dispensaries, despite Bitcoin long touting itself as the liberal alternative to traditional banks controlling so much of our currency and transactions. BitPay CEO Tony Gallippi was quoted as saying in an interview that, “medical marijuana is not allowed in our terms of service,” unfairly classing legal MMJ dispensaries along with their other forbidden transaction types, such as those for ecstasy, MDMA, other controlled substances, weapons, gambling, and sports betting. Hypocritically, they do support transactions for (often illegal) file sharing, storage and backup services, and VPN services that allow people to hide their identities entirely online, citing their idea that “freedom of information is important.”

Banks have worked in tandem with the credit card companies and Bitcoin processors, creating a total blockade by refusing to offer regular banking and payroll services to medical marijuana dispensaries. Major banking institution Wells Fargo famously denied Christie Lunsford’s medical marijuana business in Colorado checking services, stating that owing to “the complex, inconsistent legal environment relating to medical marijuana dispensaries, Wells Fargo has opted not to bank these businesses.”

Naturally, this has created a serious problem for those who rely on medical marijuana to treat their illnesses and conditions; the MMJ industry was, for a long time, forced to be a “cash only” industry, meaning that MMJ customers had to carry large sums of cash to dispensaries. This is not merely inconvenient; it made medical marijuana users walking targets for criminals.

Ergo, medical marijuana dispensaries were forced to either expose their customers (and themselves) to a great deal of personal risk, or jump through hoops to get a merchant account with a bank, lying about what sort of business they own and hoping to not get caught and shut down—not an easy or pleasant choice to make.

Thankfully, as the plight of MMJ dispensaries & delivery services has become more well-known, reputable third party services have arisen to help facilitate the provision of MMJ Merchant Services, offering legal and safe MMJ credit card processing. Global Merchant Solutions LLC, for example, allows medical marijuana dispensaries and delivery services to open merchant accounts without having to try to “fool the system” or lie in any way about what sort of business they own. Global Merchant Solutions LLC offers a full range of MMJ merchant services, allowing dispensaries to accept every major credit cards (MasterCard®, Visa®, American Express®, Discover® network, along with having access to safe and secure debit transactions, giving medical marijuana dispensaries the same right to do business safely and conveniently that any other legal small business has.

Thanks to third party services such as these, there is finally hope that the medical marijuana industry can start operating like what it is: a legal industry dedicated to safely and securing supplying people with the medication they need to live fuller and better lives.

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