Imagine walking into your office one morning and discovering that your credit card services were canceled overnight. They were cut not for non-payment and not for being involved in illegal business, but rather they were cut for undetermined “unacceptable business practices”. This is a reality faced by many medical marijuana dispensary owners who get “creative” with their apps; and if you made your app, it may be a legitimate termination, but that’s not always the case.
left without service
The above story is not unusual. It recently happened to Alternative Medical Choice, Inc., an Oregon-based consultation service. What is AMC doing that got them in trouble with their service provider Intuit? AMC is a company that offers consultations with doctors for the approval of the use of medical cannabis under Oregon law. Although the clinic does not dispense or distribute medical cannabis, it has lost its services.
Intuit claims they terminated services because AMC did not disclose its involvement in medical marijuana. When asked further about the cancellation of another 3,000 accounts they have with clinics offering the same services, they stated that they would not cancel those accounts because they did not list medical cannabis on their web pages. AMC has offered to remove the reference, but Intuit will not reinstate the account because “now we know.”
PayPal, the online payment service, has also terminated accounts associated with medical marijuana consultation referrals.
DEA, FDA, IOM and other alphabet soups
Part of the problem facing companies stems from the question of whether or not marijuana is actually medical. The DEA and the US government hold the position that smoking marijuana has no medical value. The American Cancer Society, the AMA, and the AAP all agree that smoking is not an optimal way to get any benefits, if any. Alternative methods of ingestion are being investigated.
Even the large Institute of Medicine study frequently cited by medical marijuana advocates actually opposes the use of smoked marijuana for medical benefits. The study found that there were some “potentially therapeutic” benefits to cannabinoid drugs, mainly THC, but that other available drugs offered better results. The lack of standardization, the method of dosing, and other factors make the IOM reject the idea of further study.
Where do we go next?
Like many other hot potatoes, few people want to handle this one. For those who have opened dispensaries, the challenges of obtaining funding, accounts, and traditional services have sometimes become overwhelming. For others who remain in business, alternatives are available.
While the sale of cannabis online is still illegal, the internet is a good place to look for companies willing and even eager to enter the market. By specifically looking for business account providers familiar with the risks involved in legal medical marijuana sales, entrepreneurs can find the services they need without confusion.
With 15 states and the District of Columbia already decriminalizing the sale of marijuana products for medical purposes, the issue is likely to come to a head soon. Some states, like California, plan to charge dispensaries sales tax on all of their transactions; it is unimaginable to leave such a source of income alone when the state coffers are exposed. The question remains: how will the federal government respond to the move?
Is it about money or perception?
It is easy to imagine the government moving in any direction.
Cannabis remains illegal in most of the world, and possession is considered a capital offense in many countries. The US government is unlikely to want world opinion to be so affected. On the other hand, the taxes provided by the legalization of an already flourishing industry could reach $2-6 billion.
Unfortunately for traders, there is no conclusive argument at this point. Obtaining commercial services will continue to be difficult and sudden terminations are likely until all federal, state, local and government agencies are on the same page.
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