Seeking non-legal opinions - how can this be done?

[Viceroy]

So you find your self in the medical marijuana dispensary business and you find that no bank will touch your account with a ten foot pole.  You plea "but Obama said it's ok and it's no worse than alcohol"!  And the banker just laughs, because you are an idiot.

So you think ok what about this...

Company A is a vending machine company.
The company places a ticket vending machine on a public sidewalk.  The tickets can be used as a substitute for cash at local vendors and even give an additional 5% off on certain items.  People buy the tickets with cash from the machine to redeem at local stores to take advantage of the additional discounts.

Company F is a marijuana dispensar
The operation is legal and even licensed within the state but not at the federal level.  Company F accepts these tickets along with other merchants offering various items.

From time to time company A "settles its books" with company F.

Settlement can be made by having a check sent from company A's bank account to any vendor company F wishes to settle with
- or -
company F can turn in their redeemed tickets for cash at company A's headquarters.

Assuming none of this activity leaves the state in which it occurs is there any reason the above presentation would be considered money laundering or otherwise be illegal in the USA?

[1715619723]

1715619723

[1715619723]

1715619723

[1715619723]

1715619723

[1715619723]

1715619723

[1715619723]

1715619723

[Bitco]

Company A is issuing scrip, is taking on a legal liability, and possibly violating state and/or federal law.

The point of bitcoin is that no one has any obligation to pay anything for it.  Bitcoin will still exist when company A goes bust.

[Viceroy]

Having met many dispensary owners, and customers, I cannot imagine bitcoin would be used by more than a tiny fraction.  A few smart operators will adopt it as a payment method but it does not solve the general problem of banking which is the issue I'm trying to resolve.  The objective is to come up with a simple solution that can be used right on the spot without using any time to educate the user.


In the scenario above company A is issuing scrip which is is well understood in the form of chucky cheese tokens or Ithaca dollars.  These forms of scrip are fully legal within the USA if it does not cross state borders, right?  (And maybe even if it does).   

Do you see anything fundamentally wrong with this solution? 

Does it actually solve the banking problem?

Does it expose Company A to any accusation of money laundering? 

In what other way does the issuer/manager or vendor expose themselves to liability? 
-Obviously somebody could steal tokens and try to redeem them, what else?

[Bitco]

Some states regulate prepaid cards.  It might be legal depending on how it was done.

However it doesn't solve anything.  The marijuana dispensery still won't be able to open a bank account.  So why go to the trouble of doing this?

[LostDutchman]

The whole MJ thing is about taxation.

Colorado is raking it in and there are just too many issues with using crypto for pot.

My $.02.

[Viceroy]

However it doesn't solve anything.  The marijuana dispensery still won't be able to open a bank account.  So why go to the trouble of doing this?

The company can pay the dispensaries sales tax, payroll tax, income tax, it can pay the electric bill, the salaries, the rent...

If the company can write checks on behalf of the dispensary the company can be a bank-like entity for the dispensary.






Can a token based system work as a banking solution for marijuana dispensaries?
Yes   - 1 (33.3%)
No   - 1 (33.3%)
You will still be charged with laundering   - 1 (33.3%)

Total Voters: 3


Lol, not sure I'm getting anywhere  

[zenojis]

Look into "captive insurance" I'm sure this particular scheme I'm talking about goes by other names also. The main point is to transfer all or most your companies (company X) net income to another company (company Y) (preferably company Y manages multiple companies and not just company X). Company Y's entire business is creating contracts that state something along the lines of "Pay us a variable amount each year and we promise to allow x amount payed back in the case of a yearly net loss." Company Y will generate very small realized gains, as a result so will Company X.
I am not a lawyer and I am also not a businessman, so my explanation is intentionally vague. In reality this whole setup is more complex and varies depending on local laws and business needs.

 This sort of system is how many companies are able to generate a huge amount of money and pay barely any taxes, you can even use variations of this system to get your money into foreign countries/currencies.

Please note that I have not described an "exit strategy" : i.e. I have not explained how you eventually get your money out of company Y and into a position where you can freely spend/reinvest it. Your "exit strategy" will vary depending on exactly how you set everything up and how you intend to use the money.

What I have stated is not financial or legal advice and should not be taken as such. Do your own research. I am merely sharing ideas which I think relate to the topic at hand.

edit: changed companies to be called X and Y to avoid confusion with OP's idea

[DeathAndTaxes]

Company A would be issuing prepaid access (formerly called stored value) which is regulated activity in most states.

[LostDutchman]

Company A would be issuing prepaid access (formerly called stored value) which is regulated activity in most states.

Which process would place Bitcoin directly under government control.

Is that what we want?

My $.02.