i’m from an illegal state, so i go to a dispensary and i pay with my debit card and they handed me some cash back. why is that?
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Marijuana in the US is in a weird semi-legal state where it is legal to various degrees in most states, but it is still illegal at a Federal level.
So a business that is perfectly legal as far as the State is concerned can still be shutdown by the FBI under certain circumstances. Generally speaking the FBI does leave legal dispensaries alone these days, but technically they could come down like the Sword of Damocles whenever they feel like it.
As a result banks don’t want to touch marijuana money because it opens them up to legal action. It’s at least theoretically possible that the FBI could seize the cash or charge the banks with being involved with the illegal drug trade. So they take the safe route and refuse to provide banking services to dispensaries.
This in effect forces dispensaries to operate as cash only businesses.
Some of them get around this by functionally acting as an ATM. You use a debit machine (likely registered to a different numbered company) to take out cash which can then be used to buy marijuana in the dispensary.
The important distinction is that the debit machine and the Marijuana business are acting as separate legal entities.
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