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THC Licensees

At Empirical Solutions , we apply our expertise, experience and resources to help you find the best solutions for all your industry-related banking, payment processing and financial services needs, which may include optimizing or re-negotiating some of your current relationships. We are collaborators and facilitators first and foremost, here to find the optimal fit for your business -- not to force you into a solution that may not just right. Your priorities are always first at Empirical Solutions .

Why do THC licensees struggle to obtain sustainable cannabis banking solutions?

THC licensees are typically misdescribed as all “plant-touching” operations.


However for purposes of banking compliance, ‘plant-touching’ enterprises are only subject to the highest level of internal and banking compliance and reporting protocols (Tier 1*) if they are retail dispensaries and delivery services, cultivators and manufacturers. For example, although licensed test labs and transporters are also considered plant-touching entities, they are subject to much less rigorous compliance requirements (Tier 2* or Tier 3*), depending upon the scope of their interaction with Tier 1 licensees as well as the amount of direct plant-touching revenue they generate, especially cash that they receive from their THC licensed customers and clients.

What to expect when applying for an account through Empirical Solutions

When applying for a compliant bank account, be prepared to undergo a rigorous process of due diligence and reporting, including a mandatory on-site compliance inspection of all THC-licensed facilities. Plan for 1 to 3 months of due diligence and investigations before the account can be approved and opened. The process to apply for one of our cannabis banking solutions generally requires:

  • Pre-qualification business profile

  • Empirical Solutions client engagement and one-time advisory fee

  • Introduction to best match financial institution(s)

  • Application, supporting documents, due diligence, site survey and bank application fee (where applicable)

  • Minimum opening deposit (where applicable)

  • Sector-specific monthly account maintenance and deposit processing fees (where applicable)


Empirical Solutions currently offers business checking accounts for THC licensees in the following states:

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  • Alaska

  • Arizona

  • Arkansas

  • California

  • Colorado

  • Connecticut

  • Delaware

  • Florida

  • Hawaii

  • Illinois

  • Kansas

  • Louisiana

  • Maine

  • Maryland

  • Massachusetts

  • Michigan

  • Minnesota

  • Mississippi

  • Missouri

  • Montana

  • Nevada

  • New Hampshire

  • New Jersey

  • New Mexico

  • New York

  • North Dakota

  • Ohio

  • Oklahoma

  • Oregon

  • Pennsylvania

  • Rhode Island

  • South Dakota

  • Utah

  • Vermont

  • Virginia

  • Washington State

  • Washington, D.C.

  • West Virginia

  • Wisconsin

Merchant processing for THC licensees: What are the issues?

TMF/MATCH listing

The Terminated Merchant File is a notorious list that essentially blacklists a terminated merchant and all related company principals from having merchant services for a minimum of five years. Fraudulently disguised direct merchant accounts, such as describing a THC licensee as a flower shop or a management company, are subject to easy detection and termination by the sponsor bank, whether they are conducting credit, pin-based, or pinless debit transactions.


Since any use of the major card brands for cannabis transactions requires at least some element (if not outright) fraud and misrepresentation somewhere if not throughout the payment channel, merchants may be subject to civil or criminal penalties. To date, this has rarely happened, but the risk is real.

Money laundering

Risk of civil or criminal penalties is real if transactions are not settled into a cannabis-friendly and compliant business checking account with full reporting and institutional supervision, as required by federal and state guidelines.

Civil litigation

As in the instance of a lawsuit brought by California cannabis delivery platform Eaze vs. DionyMed’s CA subsidiary Herban Industries in 2019, merchants using non-compliant and/or fraudulent payment processing may be subject to civil litigation and substantial damages for unfair competition with merchants who follow the rules.

Business interruption and lost money

When any of these solutions are shut down, it is usually without advance notice, resulting in suddenly no longer being able to accept credit card payments as well as funds pending deposit as well as reserve and security deposits being lost or withheld for up to a year.

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What about e-wallets or stored value virtual gift cards for THC licensees?

Another once promising inspired workaround solution that gained some traction over the past couple years was the ‘e-wallet’ or ‘stored value’ virtual gift card. This worked in a manner similar to PayPal in that the app software charged a credit or debit MasterCard or Visa to load payment into the e-wallet or virtual gift card, then funds could be automatically or manually transferred to the merchant’s bank account. By providing a buffer between the cannabis transaction and the payment to the merchant, the solution could claim with some credibility that it was not actually a cannabis transaction. Importantly, this is in violation of card network regulations.

Most such workaround solutions invested a great deal in developing elegant and feature-rich tech solutions but shortchanged on the banking fundamentals, in particular by glossing over or masking the true nature of the transactions from the underlying sponsor bank. So they were continuously losing vital bank connections and scrambling to replace them with new ones who they similarly misled. In many instances, these hiccups or outright system collapses resulted in substantial delays in settling merchant funds, or outright loss of those pending monies.

One e-wallet solution in particular did not choose to cut necessary corners and invested in rigorous end-to-end compliance, including full transparency and buy-in from their sponsor bank. For a time it appeared they had a sustainable and viable program. However, as was inevitable, one day their bank got a stern call from Visa ordering them to immediately cease supporting these transactions and they complied right away to avoid risking the other 99% of their transaction volume that was not cannabis-related. The operator immediately worked to find an alternative financial institution to work with, but the whole concept had now been proven unsustainable and defective since it fundamentally never makes good business sense for a sponsor bank to risk 99% of their business to preserve 1%.

B2C solutions for THC licensees under development

In the pipeline are other promising solutions that Empirical Solutions will offer if and when proven compliant, viable and sustainable:

  1. Reverse ATM: Buyers will be able to deposit cash payments directly into the merchant’s register for immediate credit to the latter’s cannabis-friendly compliant bank account.

  2. Traditional MasterCard/Visa Merchant Account: As of summer 2020, this pilot program is being tested by a Canadian merchant processing bank -- where cannabis transactions are federally legal -- that also has branches in the U.S.

  3. Crypto/Blockchain V2.0 hybrid ACH payment processing: This features unique buyer and merchant incentives and technology.

Empirical Solutions has the expertise and experience to guide THC licensees in onboarding the best current solution for their application(s), as well as automatically and smoothly transitioning them to the most-efficient solutions as they emerge.

Options for sustainable B2B payment processing

Over the past several years, Empirical Solutions has collaborated with the cannabis industry’s leading and pioneering provider of bulletproof 100% compliant B2B electronic payment processing. Similar in structure to PayPal but designed specifically for THC licensed cultivators, manufacturers, wholesalers, testing labs, and transporters, this program is also bundled with a fully-compliant, transparent, sustainable federally-insured business checking account, including cash deposit service. Our partner is licensed and bonded by the banking commission in all states where it operates:

  • Arizona

  • California

  • Colorado

  • Florida

  • Illinois

  • Maryland

  • Michigan

  • Nevada

  • Oregon

  • Washington

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