Buy legal cannabis in CT? Here’s how it will be handled

Travel to Massachusetts or New Jersey to buy cannabis. If you use a card, it is likely that the “budtender” will give you change in cash.

You give them your Visa or Mastercard, and they give you your legally purchased cannabis products and maybe a dollar or more in exchange.

“It’s treated like a cash transaction because we’re basically laundering money,” Angela D’Amico said. “That’s what cannabis dispensaries do. The banks will not support it.

Before selling it – ‘Basically I got an offer I couldn’t refuse,’ she said – D’Amico owned Compassionate Care Center, the first medical cannabis dispensary to open in Fairfield Countyin 2014.

The sale of recreational cannabis is not illegal in Massachusetts and New Jersey, and will not be in Connecticut when the state finally greenlights the first retail establishments, expected as early as December.

When retail sales of recreational cannabis begin in Connecticut, it is likely that these dispensaries will process transactions in the same way as medical dispensaries do in that state and others.

“There is nothing in our regulations or policies and procedures that specifies how these companies can transact, and we leave it to them to determine what forms of payment to accept, but due to federal restrictions, they may be limited. in the forms of payment they may choose to accept,” said Kaitlyn Krasselt, spokeswoman for the state Department of Consumer Protection. “Our medical companies allow the use of debit cards the same way they do transactions in Massachusetts.”

But neither the consumption nor the sale of cannabis is legal as far as the federal government is concerned, and banks are therefore reluctant to handle the transactions. So, retailers in states where cannabis products can be legally bought and sold limit those sales to cash transactions.

“Cannabis is federally illegal,” D’Amico said. “So we were basically doing money laundering. They saw us as drug dealers. We were drug dealers, according to the banks, according to the feds.

Jason Ortiz, executive director of Students for Sensible Drug Policy, explained that credit card companies are choosing to avoid cannabis companies.

“It’s a choice of the credit card companies based on the fact that there is no protection against them against the charge of facilitating money laundering,” he said. “Because it is still illegal activity at the federal level. So if you clean the money or mix it with “clean” money, that’s money laundering, right?

“It’s a decision they make out of fear,” he said. “An ATM transaction between you and your bank is a way around that, because it just gets you to the ATM faster than giving them money. It’s just that the money doesn’t leave never their drawer.

When you buy cannabis products, you are actually withdrawing money from an ATM, but the retailer keeps the money and gives you the cannabis in exchange.

In fact, David O’Brien, president of the Massachusetts Cannabis Business Association, said it was an all-cash business when dispensaries first opened.

“One of the things you’ll often see is actual cash transactions at the point of sale, and then you’ll also see debit cards,” he said. “But a lot of times in Massachusetts for the first two years here, they had ATMs in the lobbies, near each retailer’s register, so people could pick up money and then pay for their transaction.”

The legality of marijuana has been a kind of football, at the federal level. In 2013, United States Deputy Attorney General James M. Cole issued a memo stating that the United States Department of Justice would not prosecute marijuana-related crimes.

Five years later, then-Attorney General Jeff Sessions issued a memorandum reversing that position, to “address the growing drug crisis and thwart violent crime.”

More recently, Attorney General Merrick Garland told Congress during his confirmation that the DOJ under his direction would not prosecute “those who comply with laws in states that have legalized and effectively regulate marijuana.”

“That’s why you keep hearing about the Bank Security Act or bank security legislation at the federal level,” O’Brien said. “The feds haven’t been able to fend for themselves on anything cannabis.”

However, no such legislation has yet been passed, and Ortiz said the legislation as it has been proposed so far protects banks, not individual retailers. The overthrow of the current attorney general does not mean that the banks are comfortable handling these transactions or handling dispensary money.

D’Amico said she was let go by several big banks and had to resort to smaller processors to handle the transactions.

“It’s a gray area, there’s a lot of gray area,” she said. “But these processors are not the big five banks.”

O’Brien said they were “state chartered banks and small regional banks that only people living in a certain part of Connecticut are familiar with. That’s the kind of banks that do it, and credit unions because they’re state chartered.

Then there are the fees. Because so few banks will work with dispensaries, the ones that often charge Ortiz bank fees labeled as “absurd.”

When D’Amico started, she was paying $4,000 a month to do business with her bank. These costs have only increased.

“To only have a checking account relationship with these companies, they can charge between five and $6,000 a month just for fees,” O’Brien said.

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