Issue 24: It's SAFE to Say Cannabis is Still a Cash-based Industry
Plus: Curaleaf has a rough week, and Greenfield Greenery is stuck in limbo as CCC investigation drags on.
Welcome to the 24th edition of Burn After Reading! This is my weekly newsletter on cannabis (and other things). You can check out last week’s issue here.
This week: I take a look at the sudden disappearance of “cashless ATMs” at dispensaries, Curaleaf’s rough couple of days, and a MA applicant who is stuck in limbo thanks to a CCC investigation.
Plus, the usual round-up of cannabis news from around the world.
Retailers scramble to react as cashless ATM services flounder
If you’ve heading to the dispensary this weekend, make sure you bring some cash: An industry-wide outage of Cashless ATM systems has forced many retailers to stop accepting debit cards.
Cashless ATMs have become a staple of cannabis dispensaries in the past few years. From the customer’s perspective, the process seems just like making a regular debit card purchase. The only real difference is that the transaction comes with a small fee, and the total is rounded to the nearest $5 increment — with the difference being returned to the customer in cash.
On the back end, it’s a completely different story. Processing companies disguise these transaction as ATM withdrawals in order to throw off Mastercard and Visa, sometimes spoofing the device’s location to make it appear like the transaction happened at a nearby business — a process is more or less money laundering.
One of the more absurd theories going around was the idea that this disruption was occuring because the SAFE Banking Act was about to pass. Apparently retail cannabis investors (aka the #MSOgang) has become delusional that they think the passage of SAFE will instantly eliminate any banking issues in the cannabis space. Even if SAFE’s passage is imminent (spoiler alert: it’s probably not), it’s incredibly unlikely that the usefulness of cashless ATMs would evaporate overnight.
Anyway, services like KindTap, CanPay, and DutchiePay — which plug directly into a customer’s banking account to make withdrawals — have seemingly been unscatched by this recent crackdown. These systems are a bit more cumbersome as they require users to sign-up on the front end, but are likely to become more popular now that the future of cashless ATMs is in serious doubt.
In the meantime, it’s likely that retailers are going to be impacted by this upheaval. In-store ATMs can help soften the blow, but you’re still likely to see smaller carts and fewer impulse buys when customers can’t use their debit card. It’s also possible that average transaction times will increase as customers adapt to this sudden change. With cannabis dispensaries already feeling the pinch in times of falling prices and economic downturn, this really couldn’t have happened at a worse time.
Curaleaf is having a hell of a week
Let’s review how things been going for this Massachusetts-based MSO in the last few days:
First, CEO Boris Jordan claimed that the sudden unavailability of cashless ATM transactions was due to a “software error,” even though it was clear by that point that the problem was too wide scale to simply be some sort of bug. Jordan continues to claim that the cashless ATM crisis hasn’t impacted Curaleaf’s 100+ stores, which is also hard to believe.
As reported by Jeremy Berke on twitter: Curaleaf sent an email to the 200+ workers it recently laid off, asking for their feedback on their experiences with the company. I decided to check out the survey and see what they were asking…… "What made you decide to leave?" was a question that seemed particularly out of place, given the fact that…well.. you know.
Also this week, the NLRB ruled that Curaleaf violated labor law by refusing to bargain with unionized workers at its Chicago location. This is not the first time that Curaleaf (Market cap: $4.49B) has been caught violating federal laws and regulations.
Greenfield Greenery stuck in limbo as CCC Investigation Drags on
This fell through the cracks last week, but Shira Schoenberg at Commonwealth Magazine spoke with the folks behind Greenfield Greenery, the cannabis company that current CCC Chair Shannon O’Brien was formerly partnered with. While the company remains under investigation by the CCC, Greenfield Greenery claims that the Commission has not reached out to them for any more information. The article also revealed that the Commission initially issued the company their final license, before rescinding it a day later.
From Commonwealth Mag:
Angie Facey said since commissioners remanded the license for further investigation, they have received no inquiries or requests for information.
CCC staff said at the October meeting that the Faceys’ application for a final license was complete. In fact, according to documents reviewed by CommonWealth, the commission emailed a final license certificate to the Faceys in September, only to recall it the following day. An email from a commission licensing specialist said because Greenfield Greenery was not on the agenda for September’s public meeting, “the notice and certificate were sent in error and not valid.”
My concern has never really been the conflict of interest angle of this story. O’Brien was eager to fend off accusations that she lacked cannabis experience, and was openly talking about her role with Greenfield Greenery in the immediate hours after her appointment. That’s not exactly the behavior of someone who’s attempting to cover-up their industry ties. Plus, if anybody had typed O’Brien’s name into the search box of the CCC website, the documents showing her ties to GG would have been (and still are) right there.
The much more concerning aspect of this story has always been the details surrounding O’Brien’s appointment by MA State Treasurer Deborah Goldberg, but that’s not within the realm of anything the CCC could investigate.
If Greenfield violated the change of ownership, they should be issued a notice of deficiency, but being stuck in limbo with no communication seems like a worse punishment than any sanction the Commission can hand down.
Greenfield’s application wasn’t on the agenda for yesterday’s CCC meeting, so it looks they’ll be waiting at least another month for their final license.
Quick hits
Here are some of the top cannabis news stories from the week that caught my attention:
New England
RI’s Cannabis King and Wife Had More Than 1,000 Phone Calls & Texts With Accused Drug Dealer (GoLocalProv)
Here’s how much marijuana was sold in RI in the first week (Steph Machado | WPRI)
In major policy shift, Massachusetts clears marijuana growers to use certain pesticides (Dan Adams | Boston Globe)
National / Rest of U.S.
Does Inflation Affect Weed Sales? Poll Shows Consumption Levels Rising But Consumers Looking For Better Deals (Javier Hasse | Forbes)
Cannabis-tech firm Weedmaps is cutting up to 25% of its employees as the industry's downturn continues (Jeremy Berke | Business Insider)
Missed Moments: How Congress Almost Decriminalized Cannabis (Nushin Rashidian | Cannabis Wire)
Biden hails release of Brittney Griner from Russian prison: ‘She’s safe, she’s on her way home (Chris Stein | The Guardian)
California Cannabis Industry Owes State a Quarter Billion Dollars in Taxes (John Schroyer | Green Market Report)
International
🇩🇪 Germany’s homegrown cannabis industry awaits legalisation (The Local.DE)
🇨🇦 Cannabis execs sound alarm over alleged pay-to-play retail scheme (Matt Lamers | MJBizDaily)
🇮🇪 'I'm still pinching myself': Aimee becomes first endometriosis sufferer to get legal cannabis (Niamh Griffin | Irish Examiner)
WELCOME DISTRACTION
Weird: The Al Yankovic Story.
If you haven’t caught this yet, it’s worth a watch. This fictional biopic is available for free (with ads) on Roku TV.
CAT OF THE WEEK
It’s the holiday season, so let’s use Cat of the Week to do some good.
Each week, I’m going to be highlighting a different cat that’s up for adoption at Baypath Humane Society. If any readers adopt a cat from Baypath OR make a $25+ donation, you’ll receive a lifetime paid subscription to Burn After Reading.
This first-of-it’s kind “Buy one cat, receive one subscription to a cannabis-focused newsletter” deal* will be going throughout the month.
This week, let's take a look at Skeeter.
From Baypath’s website:
This dark and mysterious boy truly has a heart of gold. It takes a little time to see it, but with a little patience, some yummy treats, and chin scratches, Skeeter is happy to be your best friend. The world hasn't always treated Skeeter kindly, so he's still learning how to embrace the world around him.
Skeeter would do well in a house with another cat, but no dogs or kids please. He’s still available as of Thursday night — but if he finds a home before you can grab him, there’s still a bunch of other great cats available.
* Baypath hasn’t sanctioned this in anyway, they are just my particular favorite shelter. If you adopt a shelter cat from elsewhere this month, I’ll probably still give you a free subscription.
That’s a wrap on this issue. Thanks for reading! If you have any suggestions or feedback, email me here. Be sure to subscribe if you haven’t already, and if you would like to support my work, please consider a paid subscription. You have a few more weeks to take advantage of the special holiday rate.