Bill of Rights for Cannabis Merchants
The cannabis industry is in a vulnerable position due to the focus the nation and world have put on it. The cannabis industry’s exponential growth combined with a lack of financial services currently available have lured speculators from every direction, with the intent of generating profit from a nascent industry in which they have no attachment. This has created a lot of bad information coming from salespeople and organizations who have no interest in the responsible growth of the cannabis industry or your business – they are only interested in profiting from your needs.
What can you do to protect yourself, your business, and the industry? Simple, ask the right questions and eliminate the posers and fraudsters. As an entrepreneur who has put it all on the line for an industry that you are passionate about, it is your right to know. Please be aware, these same people need you to disclose your personal information in a time where fraud and identity theft have become commonplace – know who you are working with.
It is time to dispel the myth. Until there is change to federal policy, there is and will be NO legal solution that allows the cannabis industry to directly and transparently accept credit or debit cards, period. The fact is that anyone enabling a cannabis dispensary to directly accept credit or debit cards is doing so by “mis-coding” the business type, essentially misrepresenting the nature of the business when engaged with the processing bank, and this is financial fraud (a federal offense). These individuals are putting you and your business at risk.
Here are some questions that you can ask to those companies or individuals who are trying to profit, at any cost, from the difficulties that the cannabis industry is navigating. Any reputable and transparent professional in the banking or merchant services industry should be able to answer these questions without hesitation:
Cannabis Bill of Rights
- Who is the sponsor bank? A sponsoring bank (also known as an acquiring bank) is a Chartered Bank or Savings & Loan that has a membership with Visa or MasterCard in order to allow a processor access to the Visa and MasterCard networks (interchange) to process credit card transactions. Since only a bank may join Visa or MasterCard, many processors contract with a sponsoring bank in order to gain access to the Interchange Network.
- Who is the processor? A credit card processor is the company that transmits bankcard transaction information to the Interchange Network, where it is then routed to the appropriate acquiring and card issuing banks for approval and funding to the merchant. Meanwhile, the acquiring bank provides the financial backing to support the risk of merchant credit card processing and to fund businesses for sales.
- Domestic or offshore? Offshore processing can be interpreted as money laundering when it comes to medical or recreational marijuana, because cannabis is still considered a controlled substance and is prohibited under federal regulation.
- What are your qualifications?
- What is your background?
- Have you ever worked in banking?
- What is your Merchant services experience? How long have you been in the business? Since there are no “entry” requirements to become a merchant services salesperson, these questions are very important. It is very common for salespeople to come and go from the industry. Make sure you are working with an industry professional with at least 2 years of experience in the high risk and retail merchant services.
- Are you a Certified Payment Professional? May I see your certificate? Any individual truly committed to the payments industry will have completed this course. The Electronics Transactions Association offers the only certification program in the payments industry. They are an international trade association representing companies who offer electronic transaction processing products and services. Their purpose is to influence, monitor and help shape integrity in the payments industry by providing leadership, education, advocacy and freely exchanged information. The ETA represents all facets of the payments industry, from independent sales organizations (ISOs) to financial institutions, from transaction processors to mobile payment technologies and equipment suppliers.
Go With Experience. Go With Guardian Data Systems.
Guardian Data Systems is your trusted industry adviser with the real-world experience, connections and leverage your cannabis business needs to navigate the complexities of banking, payments and business management. We have assembled a team of former government officials, banking professionals and industry experts to develop unparalleled compliance programs for banking solutions. We lobby on state and federal levels on behalf of the industry, consult on banking compliance, advise for all sectors of the industry, and provide alternative payment solutions that you can count on. Remember, you don’t ask your electrician to do your plumbing, your insurance agent to provide banking and payment processing, or your attorney to provide you with your cultivation plan! So why would you trust your business with anyone else? Go With Experience. Go With Guardian Data Systems.