Decreasing the dependence on cash for canna-businesses

Multiple startups have bridged the gap to banking

We live in a credit/cash-equivalent based economy. Yet, cannabis businesses still rely on cold, hard cash for virtually everything and face immense burdens when it comes to running their everyday operations because of it. Conducting transactions in a cash-only atmosphere causes myriad issues with payroll, accounts payable, accounting and taxes.

Most traditional banks have widely shunned the industry. In order to provide guidance to financial institutions serving or hoping to serve cannabis businesses, the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury, issued expectations for banks seeking to provide services to cannabis businesses in February 2014. Among other considerations, those expectations include: verifying with state authorities that the business is duly licensed and registered; requesting from enforcement authorities information about the business and related parties; ongoing monitoring of publicly available sources for adverse information about cannabis industry clients; and filing quarterly suspicious activity reports for each cannabis industry client.

There have been a few financial institutions that have been brave enough to take on the heavy burden of servicing cannabis businesses, but at what cost? MBank, of Oregon, closed its doors to cannabis businesses, citing the difficulty in complying with federal regulations. What happened to MBank sent a clear warning to other financial institutions: If you want to service cannabis businesses, you must adhere to the difficult and burdensome FinCEN expectations. But in spite of the heightened scrutiny and due diligence requirements, there are a few financial institutions in the Northwest servicing cannabis businesses, including Maps Credit Union, Salal Credit Union and Numerica Credit Union.

As a result of the burdensome regulatory environment and the lack of financial institutions offering banking services to the cannabis industry, several companies have begun to offer solutions designed to decrease the cannabis industry’s reliance on cash transactions.

As more states legalize medical and/or recreational cannabis use and the industry continues to grow, the federal government must take steps to make it easier for financial institutions to service the cannabis industry and for cannabis businesses to have adequate access to banking services.

In the meantime, however, entrepreneurial startups are going to continue to be vital in the development and growth of the cannabis industry.


PayQwick is headquartered in Calabasas, California, but services many clients in Washington state. This platform operates somewhat like PayPal, but services cannabis businesses and consumers.

Cannabis shoppers can purchase PayQwick cards, which are linked to their bank account, and can then be used to purchase cannabis products at participating retailers. The unique “secret sauce” to PayQwick’s successful platform is that it allows retailers and producer/processors to pay each other — essentially, creating a bill-pay system. Moreover, PayQwick also provides regulatory compliance measures that oversee the process from seed to sale.


POSaBIT provides a point-of-sale terminal in retail locations that allows consumers to use their credit or debit cards in transactions with cannabis businesses. Specifically, the Seattle-based company’s model allows shoppers to acquire a bitcoin at the point of sale. Consumers then use the digital currency to make purchases at the store through the POSaBIT system. It also allows consumers to make purchases anywhere that accepts bitcoin as a form of payment.

Kind Financial

California-based Kind Financial is a unique startup that provides both software and hardware solutions designed to track and facilitate a cannabis business’ entire operation.

Kind Pay is a mobile app that provides cash-free payments to cannabis businesses. It accepts payments from individual customers and seamlessly integrates directly with other Kind products to allow cannabis businesses to accept cash-free payments and report the transaction data needed to maintain compliance with federal and state laws and regulations. In addition, Kind Financial is pioneering efforts to provide legitimate and reliable financing options for the cannabis industry.

Through Kind Financial’s extensive network across the country and partnerships with many successful organizations in the cannabis industry, the company provides services to assist cannabis businesses in obtaining access to investment capital and financing solutions.

Kind Financial also provides other services designed to facilitate the growth of the cannabis industry. The company’s Agrisoft platform gives retailers, growers and producers the tools to track and manage the entire lifecycle of a cannabis product, including the ability to allow retailers to track individual customers and the cannabis products they buy to ensure accurate tracking from growth to eventual sale.

Kind Government Solutions allows government and regulatory agencies to regulate all aspects of cannabis compliance by closely monitoring sales, growth and other critical data, as well as assisting with anti-money laundering compliance and strict financial and operational oversight.

Kind Financial’s Link to Banking platform does the leg work to ensure compliance with FinCEN regulations. Through experienced bankers and certified anti-money laundering specialists, it also provides services to assist financial institutions with conducting enhanced customer due diligence and tracking various aspects of individual transactions from seed to sale.


Lamine Zarrad, a former U.S. Office of the Comptroller of the Currency employee, created Tokken as an alternative to cash.

The app, designed specifically for the cannabis industry, is similar to PayPal or Venmo. Consumers link the Tokken app to their bank account, credit or debit cards and can use the app’s “mobile wallet” at participating retailers. When a transaction occurs, money is transferred from the consumer’s chosen payment method into the Tokken system. The payment is then credited to the cannabis business, which can use Tokken to pay bills, transact business with other entities or transfer the funds to their bank account.

Tokken operates as a middle man and attempts to completely remove financial institutions from the transaction. In addition, the app records every transaction using the Bitcoin blockchain, which purports to ensure every single transaction is recorded, irrevocable and unalterable. Tokken uses the Bitcoin blockchain to create a virtual paper trail that can be used to verify transactions and assist cannabis businesses and financial institutions in complying with federal and state regulations. Tokken also provides due diligence services that collect and monitor the critical data needed to track compliance with jurisdictional rules, laws and regulations governing cannabis businesses.


Reshvin Sidhu is an associate in the Seattle office of Williams Kastner. She is a member of the firm’s Business Litigation and Business & Real Estate Transactions practice groups. She previously served as president of the Business and Entrepreneurship Law Association and is active within Washington’s cannabis industry. She can be reached at






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