Bitcoin Forum

BitPay Not Willing to Work with Marijuana Dispensaries
http://kculshare.com/2014/01/bitpay-not-willing-to-work-with-marijuana-dispensaries/

Bars sell drugs. Why do they take drug money if it's alcohol?

MJ is "totally legal" in Washington. And there is no stigma among the many banks lending money to dispensaries. It does not make sense to me that a payment network is making my moral choices for me.
Having said that, I have much respect for Tony.

Yep, the trouble is that this is still a legal grey area: state legal, federally illegal.

What would a marijuana dispensary do if they got robbed for their cash? Only really committed stoners would get a medical dispensation to buy when it was medical marijuana. Now, just being over 21 qualifys, and that's someone from any state, and I'm guessing foreign tourists too (the average skier might well be interested, definitely the snowboarders...). They can expect alot more business, and therefore alot more money. And alot more local drug dealers that will have to look for a new income...

And so any other legitimate business, especially ones operating in a somewhat legal grey area themselves, like Bitpay, will do themselves a favour to let the dust settle around this issue before they start becoming at all involved.

At least the dispensaries can publicly demonstrate a useful bitcoin innovation, as you can take cash style BTC payments at the dispensary, but keep the access to the "register" completely off-site. That will help spread a little more understanding of what the system is capable of.

BitPay is a business that provides a bridge for companies wanting to accept Bitcoin without taking the risk of holding the volatile currency or dabbling in the Bitcoin exchange market.

Since they deal with fiat, this decision only makes sense.

Marijuana dispensaries are welcome to accept Bitcoin on their own! They already involve themselves in a risky market, so a little extra risk shouldn't bother them. :)

I still say it is arbitrary. Kinda like Amazon choosing not to sell guns. They could, but they don't. Since BitPay is a private business I do support their right to do as they wish. 

It is not totally legal in Washington. The state may allow it, but the U.S. government does not. I predict that this will result in another Supreme Court challenge to the abuse of the Commerce Clause by the U.S. government.

yep, its clever dont to deal with them in the next 2-3 years.

This will only be settled in the Supreme Court.

Has nothing to do with a moral choice,  regardless of state law marijuana is still illegal federally. Until that happens you are unlikely to see banks and or payment processors deal with dispensaries simply due to the fact that it's illegal federally.    Same reason you don't see actual pharmacies in legal states selling medical marijuana, since it's illegal federally and pharmacies receive federal licenses to operate they won't get involved.


Are you sure banks are loaning money to dispensaries ?  Banks haven't been working with dispensaries for quite some time due to federal laws and pressure from the federal government.  All the dispensaries I've ever dealt with were started up with their own money, not a loan from a bank.  Actually I've never heard of a bank giving out a loan to start a dispensary that's illegal on the federal level.


Hopefully sooner than later federal laws change, because this really is nonsense that people vote for something but business owners are still punished and treated like criminals.

Something like this won't go to the supreme court. At the end of the day the federal government would need to change current laws for something to change.

The issue of states violating federal law has already gone to the supreme court, even over marijuan spefically. It happened back in the 90s when California was the first state to legalize medical marijuana in America. I believe the ladies name who's case made it to the Supreme Court was Angel Raich (spelling?) she's from Oakland California.  The supreme court made it clear that although states can pass laws that contradict federal laws the feds still have the right to enforce federal laws and a state legalizing something doesn't protect you from federal prosecution.

This issue already went to the supreme court quite some time ago and they already ruled the feds can continue to enforce federal marijuana laws regardless of what states laws allow.  Angel Raich used the Commerce Clause as well as her defense and she lost.

http://en.wikipedia.org/wiki/Gonzales_v._Raich

Although it's not the best situation,  it makes perfect sense.

Until federal law changes there will be plenty of types of companies who chose not to get involved with businesses that are in direct violation of federal law.

I can remember back 9-10 years ago various dispensaries in California  DID accept debit/credit cards. The banks stopped working with them not out of moral reasons but because the federal government kindly asked the banks to stop (ie stop or face consequences of the law). Even things like armored truck companies have stopped working with dispensaries since they have federal licesnes, the feds kindly sent them a warning as well to stop transporting dispensaries cash.  More recently the feds have been pressuring real estate owners and threatening to seize all their properties (even 99% of those properties don't have a dispensary in them)  if they continue to rent any property to a dispensary owner.

The with states legalizing marijuana (medical or otherwise) all across the country the feds have already lost the ability to have the resources to do constant raids in all those states ,  so this method of pressuring everyone else to not work with pot stores is their last ditch effort to try to slow down the legalization movement.  As more states legalize though,  eventually the feds WILL have to throw in the towel and simply change the law so states can do whatever they want with pot.

Bitcoin needs a closer association with drugs like it needs a hole in the head.

its not a real problem , you still can recive bitcoins privatly.
dont see the fuss of this bitpay acts wisly , so no big deal/

Exactly.  We do not condemn BitPay but commend Bitcoin.

If all	fiat	payment processors decline to do business with you, your customers will need to bring fiat notes and coins to your store.
If all	bitcoin	payment processors decline to do business with you, your customers will need to send you bitcoins directly.

+1

BitPay made the correct decision to not work with the dispensaries. 

Of course the dispensaries are still free to use bitcoin.  For example, the Bitcoin Co-op in Vancouver has an open-source, web-based POS called Coinos that they would be free to use.

Go to http://pos.bitcoincoop.org/register to play around--this webpage doesn't seem to showcase all the features, but I've used this Coinos system at Vera's burgers and at Don Francesco Ristorante and it works quite nicely.

Most pot shops are just small local stores, right? They could just use an Android phone or tablet and accept payments that way, then sell the money to local traders or use an exchange directly. You can pick up a good tablet really cheap these days.

I am not sure why more people do not understand this principle as applied to Bitcoin: Water flows around, not through, obstacles.

Obama administration clears banks to accept funds from legal marijuana dealers
http://www.washingtonpost.com/business/economy/obama-administration-clears-banks-to-accept-funds-from-legal-marijuana-dealers/2014/02/14/55127b04-9599-11e3-9616-d367fa6ea99b_story.html

Should pave the way for bitcoin payment processors.

The statement by the administration is a bunch of legal nothing.

Summarized.  "We won't prosecute you, but it is still illegal and at any point in the future for any reason we could suddenly and without warning decide to prosecute you.  Also there is no legal defense or safe harbor on actions you take now even if you decide to suspend them in the future if/when our policy changes."

How likely do you think banks (and companies like BitPay) will see this as the legal clarity they need to move forward?

There was an article about it yesterday:

DENVER — Bankers should beware of the Obama administration’s newly issued green light for banks doing business with the legal marijuana industry, according to the head of the Colorado Bankers Association.

Memos released Friday by the Justice Department and Treasury Department’s Financial Crimes Enforcement Network were intended to give banks leeway to open accounts for marijuana businesses in states like Colorado and Washington that have legalized retail pot. Instead, the guidance “only reinforces and reiterates that banks can be prosecuted for providing accounts to marijuana related businesses,” said the CBA in a Friday statement.

 ...

http://p.washingtontimes.com/news/2014/feb/14/banks-warned-they-risk-prosecution-if-they-follow-/

BitPay also dropped Central Texas Gun Works on a few days ago.

That's a business that is fully legal at both the state and federal level so there's no gray area involved. It does show you how "regulatory soft power" works though. Something doesn't need to be illegal for it to generate regulatory problems for a business (or their bank).

They might have their own rules about who they work with, but the fear of being prosecuted is always there and they're probably not willing to take the risk with dispensaries.