Smoking Out Pot’s Potential
Avoiding potential compliance pitfalls begins with recognizing that the laws governing the sale of marijuana in states where it is legal are not all the same. In addition, ordinances can differ between counties and municipalities within a state.
“Applying generalities when it comes to compliance is a mistake,” says Zachary L. Venegas, chief executive of Helix TCS Inc., a Denver-based provider of compliance and security services for marijuana merchants.
While it is the responsibility of the merchant to be compliant, several payments providers enforce their own compliance programs. The reason, they say, is that while many business professionals are opening retail marijuana locations, there are just as many inexperienced entrepreneurs opening stores. These rookies may unwittingly cut corners when it comes to compliance, payments executives fear.
Besides demonstrating that transactions are legitimate, compliance includes such crucial items as making certain cannabis retailers are checking customer identification to assure they are not selling to minors; adhering to limits on the amount of marijuana that can be purchased; and ensuring that no firearms are on the premises.
Venegas also recommends verifying a marijuana merchant’s license before opening an account and conducting a background check on store owners to avoid any potential compliance issues.
“If a merchant is loose on compliance, it puts the account, and your business, at risk,” he says. “Colorado regularly performs undercover checks on merchant compliance.” In 2012, voters in Colorado and Washington approved referendums making those two states the first to legalize recreational pot.
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