In March, a Manhattan jury found Hamid Akhavan and Rugen Weigand guilty of one count each of bank fraud conspiracy. They worked with Ease, a cannabis-selling app I've heard called "the Uber of pot." They were accused of defrauding banks by tricking them into processing more than $150 million of pot transactions by building a network of fake websites and dummy companies. What does this mean for other companies involved in processing payments for cannabis businesses? Are other companies doing similar things? Using dummy companies and fake websites does sound disreputable to me. Is processing payments for marijuana businesses too risky and inherently shady, too, no matter how you do it?
Bart Ryerston, Merchant Level Salesperson
You are correct that processing transactions for cannabis-related businesses is a high-risk endeavor. Since banking is regulated in the United States on both state and federal levels, determining whether and how to process payments for cannabis businesses is daunting. While a number of states have declared marijuana for medicinal and/or recreational to be legal, the federal government still classifies marijuana as a Schedule 1 drug. Thus, according to the federal government, it has high potential for abuse, is highly addictive and has no medical use—and the government can go after banks that handle transactions for cannabis businesses. Of course, states that have legalized it disagree and would not likely deem processing payments for marijuana businesses to be "inherently shady."
The situation is evolving. Those serving cannabis businesses need not resort to subterfuge like the felons from Ease did. Max Miller, CEO of Paybotic, has expertise on processing payments for cannabis businesses and has written several articles for us. You'll find them at https://bit.ly/3vnZZJf. However, by providing information on this topic, neither Max Miller nor The Green Sheet is offering legal advice. For that, it is wise to seek the advice of a legal professional.
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