Arizona marijuana dispensaries can now join the digital marketplace thanks to an experimental program approved by the state’s attorney general’s office.
Arizona Attorney General Mark Brnovich authorized Alta, a Phoenix-based tech company, to roll out an experimental program designed to give state medical marijuana dispensaries a digital alternative to cash. Alta joined a group of other tech and business companies in the attorney general office’s financial technology sandbox program on July 11. The program allows approved tech companies, like Alta, to bypass required state and federal licenses and operate within its desired marketplace for a maximum of two years.
Through the program, Alta becomes the first company of its kind in Arizona to offer a digital alternative to cash for medical marijuana dispensaries statewide.
Sarah Wessel, chief operations officer and co-founder of Alta, said participating dispensaries that partner with her company are able to exclude cash payments altogether.
The process works like this: Dispensaries enroll to Alta’s program online and the company sends an armored vehicle to pick up the dispensary’s cash and exchanges the money for digital “tokens,” which are redeemable for U.S. currency. Dispensary owners pay a transaction fee to use Alta’s services, which are available online, and pay participating vendors and utility companies with tokens instead of cash.
Unlike other cryptocurrencies, Alta’s token system has a fixed value–one token is equivalent to $1, Wessel said.
Wessel said she hopes her company’s business model can help dispensaries across Arizona operate more like a conventional business with a bank account and provide peace of mind to dispensary owners.
“We wanted to create a solution for dispensaries so they no longer have to operate solely in cash,” she said. “These are legitimate businesses that want to operate just like the coffee shop next door to them but they can’t do that right now.”
Though medical marijuana dispensaries are able to operate legally in Arizona, possession and sale of the drug still remains illegal at the federal level–which poses a serious legal risk for national banks.
Until legislators bridge the gap between state and federal regulations, dispensaries are forced to operate in a cash-only market, making normal business activities, like paying taxes and utility bills, more difficult and prone to crime.
“My business partner and I have a close friend in the industry who has had some near-death experiences just going to pay his taxes,” Wessel said. “So, we saw this problem and wanted to find a solution.”
Demitri Downing, founder of the Arizona Marijuana Industry Trade Association, said a digital payment alternative for dispensaries is long overdue. However, with the Secure and Fair Enforcement (SAFE) Banking Act gaining traction in Congress, Downing isn’t sure how valuable a digital alternative run by a private company will be if the SAFE Banking Act becomes law.
“I think it will pass in the next year. So, marijuana businesses will have banking systems that are protected by law,” he said. “Will anybody use it (Alta)? I don’t really know. And, what assurance does a dispensary owner have that if they hand over their cash it’ll retain its value?”
As a participant in the Sandbox Program, Alta is subject to the Arizona Consumer Fraud Act and is required to report business records to the state attorney general’s office throughout its term in the Sandbox.
The company also plans to keep its clients’ money in a deposit account with an “excess of SIPC (Securities Investor Protection Corporation) insurance of $1 billion,” Alta Chief Executive Officer Jesse Forrest said via email.
Like Downing, Moe Asnani, co-owner of The Downtown Dispensary and its sister location D2 Dispensary in Tucson, said he’s confident the SAFE Banking Act will pass by 2021. Until then, Asnani said Alta’s new service can help dispensaries alleviate the hassle of a cash-only market but isn’t sure it’s worth the extra cost.
“I appreciate the fact that they are trying to solve this problem but long term, I think by 2020, and at the latest 2021, banking will not be an issue for the cannabis industry,” he said. ■
This article appears in Aug 8-14, 2019.
Check this out the ” Smart -and-Safe Initiative “
https://3g6615161omg2tl5k03v3pnt-wpengine.netdna-ssl.com/wp-content/uploads/2019/08/Smart-and-Safe-Act-Initiative-1.pdf
This is not good, a cap of 31% on state taxes, local taxes now and can be attached higher by counties. If the feds legalize and tax @ 30% to as to write off the now related business expenses and overhead that will be allowed a legal business associated with marijuana.
So in reality if the feds make legal we the patient the fighter for this will now have the opportunity of paying 60% total tax on marijuana.
If that is not bad enough a set amount goes to police and fire training equipment pensions that Ducey just made solvent. This has not done well for the citizenry or the police in the past all of this non-accountable expenditures as shown with the Pima county shifting monies to the Volunteer fund then siphoning off with no accounting. Deputies taking pleas and killings so are we just paying extortion? Do we want police administering drugs and collecting direct funding we have a representative government this stuff make a police state.
Not only that this want to pay out of state investors for failed product. Just wait till I get to the gift options and recording who those contributors.
this is not good
1. Adults (21+) would be able to possess 1 ounce of marijuana with no more than 5 grams of it being marijuana concentrate (extract).
2. Limits home cultivation to 6 plants at an individuals primary residence and 12 plants at a residence where two or more individuals who are at least 21 years old reside at one time.
3. The Arizona Department of Health Services (DHS), which regulates the states existing medical marijuana program, would have to establish recreational marijuana rules on or before June 1, 2021.
4. A 16% excise tax would be placed on recreational marijuana products. Money from the excise tax would fund various state agencies and be dispersed between community college districts, police and fire departments, and the Highway User fund.
5. Marijuana use would remain illegal in public places (restaurants, parks, sidewalks, etc). Offenders are guilty of a petty offence.
6. No marijuana products could be sold that imitate brands marketed to children or look like humans, animals, insects, fruits, toys or cartoons.
7. Marijuana edibles will be limited to a maximum of 100mg of THC per package.
8. Employers have the right to maintain a drug- and alcohol-free workplace.
9. Driving, flying or boating impaired to even the slightest degree by marijuana would remain illegal (i.e., zero tolerance rule).
10. Marijuana testing facilities will test marijuana for harmful contaminants (i.e., pesticides, molds, etc).
11. Qualified early applicants (qualifications are currently undetermined) can apply for a recreational dispensary license with the DHS. Any remaining or additional licenses will be provided by random selection.
12. The DHS may issue a marijuana establishment license (recreational marijuana dispensary license) to no more than two recreational dispensaries per county that contains no medical marijuana dispensaries, or one recreational dispensary license per county that contains one medical marijuana dispensary (the DHS will accept applications from Jan 19, 2021 Mar 9, 2021).
13. On or before April 5, 2021, medical marijuana dispensaries will be able to sell recreational marijuana to adults until the DHS issues licenses for recreational dispensaries.
14. Medical marijuana dispensaries that obtain a recreational marijuana dispensary license(s) could operate both entities in the same/shared location.
15. Possessing more than one ounce but less than 2.5 ounces would be a petty offense. Minors caught with less than one ounce would receive up to a $100 fine and four hours of drug counseling for a first offense. A second offense would be up to a $100 fine and eight hours of drug counseling. A third offense would be a Class 1 misdemeanor.
16. Smoking in a public place would be a petty offense.
17. On or after Jan 1, 2023, the DHS can adopt rules to permit recreational marijuana deliveries.
18. Beginning on July 12, 2021, people convicted previously of possessing less than an ounce of marijuana or six or fewer plants or paraphernalia can petition to have the record expunged.
it is what they dont tell you no deliveries anymore rules for home grow will need to be ok’d by local governments incl homeowners association even if you own the home deed rights signed away. Oh yea read for yourself tied with SB1492 where Arizona will pay for out of state owned to be transported out of state product that fails.
If any legalization happens it needs to look at Arizona’s marijuana like the land grant with the universities. All of the product belongs to the people of the state of Arizona first. This cant be sold transferred or negotiated away by regulations the legislature.
WE in Arizona can do what we want as there is not federal guidelines or legal precedent on Marijuana rules within the state.
The gift clause should cause concern that has a real nasty history and abuse to misuse. Simply put a California producer could ship to Arizona for testing in Yuma get paid for rejected product then turn the rest over for disposal as a gift.
read it for yourself this is it all 16 pages it does not say what the intention is with medical.
https://3g6615161omg2tl5k03v3pnt-wpengine.netdna-ssl.com/wp-content/uploads/2019/08/Smart-and-Safe-Act-Initiative-1.pdf
And now some dispensaries are adding a classroom yea a classroom to reimbursed by the MMJ monies as a learning center. Not a cent to go to education like this!
A community college that has cannabis courses available only can receive funds. I have been a user for years like most here. Going into a dispensary you see at times pretentious bud tender shoulders back and straight state there is sativa and then there is indica. That’s about the extent, oh yea CBD myths no peer reviewed data on any CBD just testimonial from those that have money on the line. Pick up any literature at any dispensary and a ton of testimonials. Then you have self appointed advocates that want royalty rights to educational materials and bogus books which is bunk.
How many hands are out expecting a big payday.