A couple of years ago I was in Boston and decided to take a trip to a cannabis dispensary. Nothing about it was convenient — I had to take the T to Brookline, and once I was there I had to wait outside in line for about an hour before I could come inside. Ironically — or perhaps tellingly — the store was a repurposed 19th century bank building, but instead of tellers behind the glass it was people you could buy weed from. But the whole thing was done in cash.
Don’t worry, you’re not in for a Maureen Dowd-esque tale about the horrors of not reading the dosing instructions on edibles. Honestly the whole experience was a somewhat whimsical mix of the novel and the mundane — marijuana in a package from a store, neat! And whatever novelty I might have derived from the experience wore off a long time ago; Maine, Connecticut, Rhode Island, New York, New Jersey, Vermont, Virginia and the District of Columbia have all joined Massachusetts in legalizing recreational cannabis on the East Coast, and only 13 states have neither medicinal nor recreational cannabis laws on the books.
In other words, cannabis increasing is more legal than not, and as such represents a $13.2 billion market that is only poised to grow. But because cannabis remains a Schedule 1 controlled substance at the federal level, banks and credit card companies run considerable compliance risk if they do business with legal cannabis firms. That means those businesses have to either deal in enormous volumes of cash — a huge risk for the companies, and another compliance headaches for