After hiccup, Great Barrington dispensary again accepts debit cards
Four days after Theory Wellness had to shift to all-cash transactions, it has resumed accepting debit card payments.
Nick Friedman, the company's president and chief financial officer, said Theory Wellness was able to restore service with Merchant Services Consulting Group of Florida, a company that processes debit card payments.
The company, which has an office in Westborough, notified customers in Massachusetts last Monday that due to uncertainty about the federal government's position on the cannabis trade, it was bowing out.
That same day, U.S. Attorney Andrew E. Lelling said he could not guarantee he would look away from operations related to state-sanctioned cannabis businesses. His statement came four days after Attorney General Jeff Sessions announced the Justice Department would no longer follow an Obama administration advisory that directed prosecutors not to intervene in states where residents voted to allow cannabis use.
Friedman said he is confident that despite the shift at the national level, cannabis companies allowed under Massachusetts laws will be able to operate.
The recreational cannabis market is scheduled to get off the ground July 1, after the Cannabis Control Commission adopts regulations, takes applications and grants licenses.
"I don't anticipate any changes," Friedman told The Eagle. "It is a reminder to continue to operate in full compliance with our state regulations, as we have been since inception."
He added, "We must remember that having state-regulated dispensaries is a safer, above-board alternative to the un-regulated, un-tested black market."
Friedman declined to say whether Theory Wellness has received assurances that the payment-processing company will continue to do business in the Bay State.
A recorded message on the company's Westborough office line said no one was available to help callers. An effort to reach Stephen Brudner, the firm's managing director in New England, was not successful.
Merchant Services Consulting Group appears to have years of experience working with the cannabis market.
A 2014 webinar posted on its website offers guidance on how businesses that handle marijuana can maneuver through a tricky banking terrain.
That is an issue because of the federal government's ongoing opposition to cannabis legalization. That stance affects federally chartered banks, which have seen work with the cannabis industry as a form of "aiding and abetting a criminal enterprise."
In the webinar, Brudner and a national cannabis expert outline banking challenges that have faced the cannabis industry. A key one, early in the emerging industry, has been how to safely handle significant cash receipts and how to avoid being flagged, in card transactions, as a "suspicious activity report."
Brudner said players in the financial services industry generally want to see the issues resolved. "How do we alter banking laws to strengthen the security of an entire industry?" he asked. "We're closer at this moment than we ever have been before."
Aaron Smith, co-founder and executive director of the National Cannabis Industry Association, cites the "terrible crisis" facing the marijuana trade when it comes to banking.
"Banks have refused to do business with state-authorized marijuana organizations because of their fears of getting caught up in federal money-laundering laws," Smith says in the webinar.
Along with its dispensary at 394 Stockbridge Road in Great Barrington, Theory Wellness runs a growing facility and dispensary in Bridgewater. This week, Theory Wellness was reimbursing customers for any ATM fees they incurred getting cash for their purchases.
Larry Parnass can be reached at email@example.com, at @larryparnass on Twitter and 413-496-6214.
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