Above: Legal marijuana buds from Forbes.
Hawaiian state officials announced Tuesday that Hawaii will be the first state to require the sale of marijuana to be cashless, paid with a special debit card payment system next month.
“Oct. 1 is our target date to try to go cashless as much as we can,” Iris Ikeda the state’s financial institutions commissioner, told reporters at a news conference.
While marijuana is legal for medical use in Hawaii, the feds still consider it a Schedule I drug. This status has brought problems for many banks and credit unions, which is the reason why cannabis dispensaries have been cash-only.
The Governor of Hawaii, David Ige, has praised the cashless move stating:
This cash-free solution makes sense. It makes dispensary’s finances transparent, and it makes it easier for the patients who are being served.
Instead of cash, customers will have to download and install CanPay, a mobile app that processes payment for medicinal marijuana shops using a Colorado-based credit Union, Safe Harbor Private Banking.
The app is already an option for marijuana transactions in six states, including California and Colorado.
“You download it on your smartphone. It will link up to a checking account and you will get a QR code. With that code you are able to use that at the dispensary,” Ikeda said.
Now a battle begins with credit card processing companies like Visa and Mastercard who say they won’t allow their cards to be used to buy cannabis or marijuana-related products.
Dispensaries should consider instead using cryptocurrency for their payments since they are already using a QR code and digital assets use a wallet that can only be taken from with the private wallet password, so their funds would be safe from potential robbers and from the government seizing assets.
Hawaii was among the first states to legalize medical marijuana in 2000 but the state didn’t grant licenses to dispensaries until last year. Maui Grown Therapies became the first to open last month after the state Department of Health gave it the approval to begin sales.
There is an increased uncertainty over how the Trump administration will react. Attorney General Jeff Sessions has continuously said he wants to “crack down on the legal marijuana industry” and that the plant causes “violence.”