Ohio’s new medical marijuana law proposes a new way around the bank problem. The law allows state officials to set up a “closed loop” payment processing system, similar to prepaid debit and gift cards.
Sen. Bill Coley, who proposed that part of the law, said it will alleviate security concerns associated with securing and transporting large amounts of cash and prevent illegal drug suppliers from abusing Ohio’s program.
The Southwest Ohio Republican told attendees at a medical marijuana conference here Thursday that state officials are already working on such a system ahead of the law’s Sept. 8 effective date.
Here’s how he sees it working:
- Patients and registered caregivers would add money to their accounts by check, credit card or cash at a state-licensed liquor store, deputy registrar or other state agency that takes payments.
- Money in the accounts could be used to buy marijuana at dispensaries.
- Dispensaries, processors, testing labs and cultivators would also have accounts on the system. Businesses would buy products and pay bills through the accounts.
- If a business wants to pay an entity outside of the closed loop system, the state would cut a check to the payee.
Every transaction in the industry would be known, Coley said, and available to the federal Financial Crimes Enforcement Network.