Legalizing and Close-Looping In; Ohio’s POT-ential Payment Processing Platform
On June 8, 2016, Ohio’s Governor John Kasich signed House Bill 523 into law, making Ohio the 26th cannabis complaisant state in the country. HB 523 will go into effect on September 8, 2016, giving qualifying patients access to medical marijuana. To grapple with the cannabis cash conundrum, HB 523 authorizes a state mandated “closed-loop” payment processing system.
If enforced, the Ohio Department of Commerce, which is the governing body in charge of implementing HB 523, would control the system. According to Ohio senator Bill Coley, the system would allow Ohio’s medical marijuana patients and registered caregivers to put money into special accounts using checks, credit cards or cash. These deposits would take place at state-licensed liquor stores or a state agency’s office. Account holders could then use the money in their accounts for marijuana dispensary purchases. Licensed marijuana businesses in Ohio would also have access to the proposed closed-loop system. Cultivators, processors, laboratories and retail dispensaries licensed by the state would be able to pay each other using the proposed system. To allow marijuana businesses to use the closed-loop system to pay non-participating entities, the state would cut a check to the recipient. All transactions within the system would be recorded and available to all state and federal law enforcement agencies.
Ohio hopes that such a system, if implemented, will prevent gangs and cartels from getting their hands on revenue from licensed marijuana transactions. Additionally, the state believes that a closed-loop system will be able to stop the use of state-authorized marijuana transactions as a cover for illegal drug trafficking. While the proposed system has its critics, many agree that it could be a solution to the legal marijuana industry’s dependence on cash. Those in favor of the system cite other payment processing platforms that have been operating effectively in states that have legalized the recreational use of marijuana.
PayQwick’s software platform is the only successfully functioning payment processing platform that encompasses all aspects of Ohio’s proposed closed-loop system. In addition, PayQwick’s compliance assessment programs, which incorporate standards from the Cole Memo, Bank Secrecy Act/Anti Money Laundering Control Act protocols, the FinCEN Guidelines and each state’s marijuana rules, have already helped numerous legal recreational marijuana businesses in Washington remain compliant and get business bank accounts. Additionally, PayQwick’s business-to-business electronic payment processing platform, armored car cash pickup service, Bill Pay Option and consumer loadable cards and Smartphone App and have made it easy for these businesses and their customers to operate efficiently without the hassles and dangers of cash. PayQwick has proven that, when rooted in compliance and diligently monitored, a system like the one proposed by Ohio not only works, but also helps the legal marijuana industry thrive.
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