New Marijuana Market: Money Management

PayQwickBanking continues to be a thorny issue for many legal marijuana businesses. Although cannabis is legal in several states, it is still not legal under federal law, and the nation’s federally-regulated banks are still reluctant to service such businesses. Marijuana entrepreneurs themselves are anxious that by using federal banks, they may open themselves up to money laundering charges.

This forces cannabis entrepreneurs to transact cash-only businesses, even in paying their taxes. Large sums of money change hands along the chain – from growers and producers to retailers – making these cash businesses open to security risks such as theft. Many have to hire security firms just to protect their transactions.

Money management is thus one of the real needs in the legal marijuana industry. Now, some industry players are aiming to fill that need.

Kenneth Berke is the CEO of PayQwick, a cashless payment system startup based in Calabasas, California. He and his colleagues never dabbled in pot before, but as businessmen, they saw the “tremendous need [for] normal business practices”, particularly banking, in the cannabis industry.

Together, they created PayQwick, the money services business which is currently, according to its website, the first and only one in this field that’s federally registered. It also has a license from the Washington State Department of Financial Institutions to serve the recreational cannabis sector.

The system is geared towards both marijuana businesses and their consumers. It replaces cash with a physical card, similar to a regular debit card. Consumers can link up the card to their bank accounts and use it to pay for their marijuana goods. Businesses, on the other hand, can accept payment and transfers from consumers and other businesses. They can also pay bills, ensure I-502 compliance, and enjoy a rewards program through the system.

In addition, PayQwick offers other business services such as cash tracking and armored car pickups. Cash tracking is particularly important for cannabis businesses, because it is needed to comply with the guidelines of the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

As a young company, PayQwick is currently operating only in Washington, partnering with six retail shops and three producers and processors. It is currently one of its kind in navigating the tricky maze of marijuana money transactions and management. However, more companies are expected to follow this track, as money management could only grow exponentially together with the industry.

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