The marijuana industry is picking up as legalization sweeps the country, but there are still some wrinkles to be ironed out.
In particular, most banks won’t deal with weed businesses, which means they can’t take credit cards.
That means buyers have to carry cash, and sellers end up with huge amounts of cash on hand — some dispensaries in Denver can do sales of $500,000 per month. Transacting in cash increases the risk of theft, and if the sellers try to deposit large amounts of cash at the bank, they can be suspected of money laundering or other crimes.
But one company thinks it’s found a way to keep both banks and legal weed businesses happy.
Tokken is a secure mobile payment option coupled with identification checks that meet banks’ stringent requirements. It was founded by a former Marine and regulator at the U.S. Office of the Comptroller of the Currency, Lamine Zarrad.
“The trend is irreversible,” Zarrad told CNBC at the South by Southwest Festival in Austin, Texas. “Cannabis is not going anywhere.”
Here’s how it works. First, a purchaser agrees to let Tokken verify they can legally purchase weed. That verification may include checking mobile carrier records, gathering bioidentification data used to log into your phone or triangulating who you are based on GPS coordinates.
Once your information checks out, you can upload your credit card information to the app. When you want to buy marijuana, you simply provide a numerical code to give to the