Convertible Virtual Currencies Potential effect on the Cannabis Industry
As new cannabis legislation moves through New Mexico’s, and other states’ legislatures, one thing remains starkly clear: a credit card still cannot be used for buying cannabis at a legal dispensary.
Many dispensaries and producers are upbeat about the possibility of Federal legislation changing that, but so far that’s proving difficult, and many cannabis-related businesses (CRBs) are turning to the shadowy world of cryptocurrency instead.
“Crypto today is a lot like cannabis was seven or eight years ago,” says Sundie Seefried, CEO of Safe Harbor in Colorado and the author of the influential book “Navigating Safe Harbor.”
In other words, regulators are still trying to figure out what to do with this new technology.
The main issue with CVCs, or convertible virtual currencies, is that Federal regulators don’t consider it “money” the way most of us do. New proposed guidelines from regulators could make it easier for some businesses to access CVC funds, but only those that specifically do money exchange services. The new guidelines would not include other types of retail or service businesses.
Seefried sees many CRBs in Canada, for example, applying for international licenses and assume that doing so could help them move money. But that approach will not work in the U.S. The Bank Secrecy Act guidelines here regulate reporting on those funds, and don’t include provisions for any type of CVC today.
When Safe Harbor started seeing these CRBs enter the market, “we assumed that a lot these companies were small businesses, grey or white market, but you’re attracting a high caliber of operator,” Seefried said.
“Today,” she said, “you can’t run a dispensary with CVCs or cryptocurrencies, but Safe Harbor licensed firms – credit unions like Aery Group – can help you and your dispensary get the business account you need to keep your money (and your employees) safe, secure, and compliant with federal laws.”
At Aery, we've developed procedures that give CRBs access to many of the features employed by other business accounts that we offer, and that includes wire transfers and debit cards.
Note: Aery Group holds no opinion on the legalization of adult-use cannabis.