Nevada lawmakers recently passed Assembly Bill 466 that lays groundwork for a new closed-loop banking solution for the marijuana industry. This legislation authorizes the Nevada state treasurer to “create a pilot program for the establishment of one or more closed-loop payment processing systems to facilitate certain financial transactions relating to marijuana; setting forth certain requirements for a closed-loop payment processing system; and providing other matters properly relating thereto.”
The primary goal of this new banking solution is to reduce the risks involved with cash only businesses and transactions. State officials are hoping that the new payment system will eliminate armed robberies and provide a more sustainable method of cannabis commerce.
Nevada State Treasurer, Zach Conine detailed the specifics of the pilot program. “So the goal here is that when cash comes into the dispensary it's converted through this system into a token and in that token can transmit between say the dispensary and production company, from a production company and a cultivation company, cultivation company and a landlord. Then the landlord converts the tokens using our vendor and our administrator back into cash.” Conine explained.
This new token based payment system is very similar to cryptocurrency however the state is responsible for its creation and oversight. Nevada cannabis dispensaries can choose to use this new closed-loop banking system but are in no way required to do so. Although, larger dispensaries who have been robbed or experienced an attempt at theft will probably take advantage of the new cashless payment option.
Dispensary supervisor, Dustin Babaeghian, Silver State Relief remarked that, “We're really excited to see changes in the banking in the state. we think that it's a positive move forward and we're excited about the convenience it's going to give us and our patients.”
The Nevada Treasurer has indicated that the new closed-loop banking solution will be fully functional by July of 2020. It’s incredibly likely that Nevada will be serving as a testing ground for a closed-loop banking system and if successful, other states will adopt similar programs. As long as the federal government is unwilling to make cannabis legal, state governments will have to continually find a way to circumvent the feds so that the cannabis industry is more secure.