While they often talk about crime and school children using marijuana, these fears are largely not actually becoming reality, as we have seen in states like Colorado that have legalized the recreational use of marijuana. The reality is that that this increase in crime is not likely the real impetus behind police wanting to stop marijuana legalization.As our Riverside cannabis business attorneys can explain, the real reason that most law enforcement agencies want pot outlawed is because it gives them the perfect excuse to stop a car and claim they had probable cause to do so. This is not a new issue, as it has been the basis of many studies, including one from Law and Human Behavior. In order to understand the issue, let’s look an example of how this can work in the real world.

The police may be in a rental car already on patrol in a “high crime area” in the LAPD Metro district when they see a car driving that they want to stop. While they have no actual probable cause (legal reason) to stop the car, they believe the occupants are likely to have weapons, drugs, or open warrants. They cannot say that they stopped the car based upon what the occupants looked like, because that would be profiling. However, if they say they smelled marijuana, and marijuana is illegal, the can pull over the car on that basis and search the entire car and all the occupants to find marijuana. They are able to open any container that is large enough to hold marijuana, which means they can look everywhere in the car. They can even tear the headliner out, which they often do. The headliner is the fabric where the windshield meets the roof.

If they don’t find any marijuana, that doesn’t negate probable cause. They can be mistaken, as long as they say they were acting in good faith. They can also seize any contraband they find during the search and arrest the occupants. There are many cases in which officers claimed to smell either marijuana smoke, or even the odor of unburnt marijuana coming from a single joint, while they were traveling in a different vehicle in the opposite direction.

While this sounds insane, and it is, it happens all over the country. However, when marijuana is made legal, many laws state that the smell of marijuana can no longer be used a pretext for stopping a car. This is not to say that all or even most police officers are dishonest. In fact, most do the best they can at a very hard and dangerous job, but there are certainly those cut corners and do not do the right thing. Using marijuana as a basis for car stop, even when no marijuana was ever found, happens all the time, and this is a major reason law enforcement groups are really against legalization.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Marijuana Odor Perception: Studies Modeled From Probable Cause Cases, April 2, 2004, By Richard L. Doty, Thomas Wudarski, David A. Marshall, and Llyod Hastings, Law and Human Behavior, Vol 28

More Blog Entries: Report: Colorado Marijuana Laws May Not be Safe, Feb. 5, 2017, L.A. Marijuana Lawyer Blog

As it still stands, Visa and Mastercard have made it explicitly clear they will not work with marijuana retail companies until the federal government changes the law and legalizes the drug. But that could mean opportunity for some other financial firms willing to take the risk.

Now, an app called CanPay has announced the creation of the very first debit payment solution available to buyers of cannabis in Colorado, Washington and Oregon.

This is an important adaptation for a few reasons. The first is that most people take for granted that they can use their credit or debit cards anywhere. That’s not true at marijuana dispensaries. At some locations, dispensaries will provide an on-site ATM so that customers can easily access immediate cash. However, those machines often charge $5 per use.

On top of that, because dispensaries and pot shops can’t maintain bank accounts, they have to deal in all-cash. That means there is a significant security risk, which requires a greater investment in staff and personnel.

Some dispensaries say they already accept debit and credit cards, but as the CanPay CEO pointed out, some are using MasterCard and Visa solutions not approved or endorsed by those firms. Marijuana businesses and dispensaries that have set up bank accounts often do so by misleading the bank as to the nature of the operation. This can be risky for all parties involved and if/ when the bank does discover it, they close down the account, which can cause business to come to a grinding halt.

Visa and MasterCard aren’t the only companies to reject marijuana merchants and customers. Google and Apple do as well. That means neither allowed CanPay to install its payment app in their mobile stores. For this reason, the company had to build a separate website to set up the app. The company says for this reason, the site is more secure than payments made by debit or credit card.

According to Forbes, the way it works is the customer pays for the transaction by accessing the site on their smart phone. The CanPay app then offers a single code or token. This is then offered to the retailer, who pays the transaction fee.

Our cannabis lawyers know all those who work in and near marijuana businesses face substantial challenges that most other industries don’t need to give a second thought. The issue of payment is a pain point for many cannabis operations, and if CanPay can solve it, that makes for a more effective business model.

The company reportedly only partners with financial institutions and depositories that already work in the marijuana industry. That ensures all parties know exactly who they are working with and that they are in compliance with all state regulations for each transaction.

CanPay executives say eventually, larger corporations will begin to enter the fray once the federal marijuana law changes (and there is confidence that it will). However, the hope is the business relationships established now will continue even when that time comes.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

CanPay Debuts First Legitimate Debit Payment System For Cannabis Purchases, Nov. 17, 2016, By Debra Bochardt, Forbes.com

More Blog Entries:

LASD Seizes $7M Worth of Marijuana, Edibles in Canyon County Strip Mall, Nov. 4, 2016, L.A. Marijuana Dispensary Attorney Blog