Hawaii is introducing a cashless system for the state’s medical marijuana shops, and no one much likes the plan. The state wants the entire industry to conduct sales transactions via a mobile app. Residents and business owners are not very happy with the proposal, which is set to be enacted at the beginning of October this year.

Cashless Banking Solution

The cashless system is based on a mobile app called CanPay. The app will utilize the financial services of a Colorado credit union called Safe Harbor Private Banking, which was set up specifically with cannabis businesses in mind. All retail sales of medical marijuana in the state of Hawaii will happen using the CanPay app starting in the beginning of October.

Dispensaries will also be able to use the credit union banking relationship for behind the scenes financial services like payroll, sales tax, and vendor payments. The Department of Commerce and Consumer Affairs’ Division of Financial Institutions said that the cashless system will “directly address many concerns we have and problems encountered by the dispensaries”, but whether those problems are real or imagined is an open question.

Solves “Crime Problem” That Does Not Exist

Critics argue that the cashless system is a solution looking for a problem. Hawaii is a relatively small state. Each of the eight Hawaiian islands has only one dispensary on it, and medically authorized patients are only able to use the dispensary on their home island. As a result, locals argue, dispensaries rarely hold much more cash than other businesses.

In fact, only two dispensaries are even currently operating in Hawaii so far, with others currently at “various stages of development” on their way to providing vital medical services. There is no indication that the dispensaries have experienced any crime problems so far at all. Looking at the industry as a whole, there is evidence that crime rates actually drop in the area around operating cannabis dispensaries.

Adds Centralization Risk To Hawaii’s Entire Cannabis Sector

The biggest problem with the whole scheme is the risk that attaches to the businesses and patients in Hawaii by relying on the system. That risk comes from the centralized nature of the plan. It is still not entirely clear whether the state will prohibit cash transactions, but it seems likely given the governor’s statement.

“The solution makes Hawai‘i the first in the nation to have a cashless dispensary system.”

Still, the message is vague, with the DFI commissioner saying at a press conference that officials had not discussed turning away patients paying cash.

Centralization of services carries inherent risks, and many Hawaiians are wondering what would happen to Hawaiian cannabis businesses if hackers compromise the system. Worse, they worry what would happen if the federal government decided to step in with restrictions or even a complete shutdown of the single credit union tapped to provide services to the state’s entire fledgling cannabis industry.

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