May 2023
The Issue
While every state has a requirement that marijuana-related businesses (MRB) check a valid form of ID to confirm customer or patient purchase eligibility - without exception - some states do have language in their regulations that has successfully been interpreted to mean that operators aren’t required to - or legally cannot - retain that information or provide it to their banking partners.
While the regulatory language differs from program to program, they’re often similar to this example from Massachusetts:
"Regulations made pursuant to this section shall not: [...] require a customer to provide a marijuana retailer with identifying information other than identification to determine the customer’s age and shall not require the marijuana retailer to acquire or record personal information about customers other than information typically required in a retail transaction;"
https://malegislature.gov/Laws/SessionLaws/Acts/2016/Chapter334
How This Affects Financial Institutions
Most of your MRBs likely interpret this language to mean that they can pass ID information to you in order to fulfill a key compliance requirement so you may not have received any feedback from your customers/members, but operators that feel it’s prohibited can find support in both regulations and statutes to support their assertion that they cannot.
Until we receive clear guidance one way or the other from a state regulatory agency, neither Green Check Verified nor a financial institution can require a cannabis operator to share ID information in a state with rules like those in the Massachusetts example above.
Green Cheek’s Response
We have removed missing ID information as a condition that would lead to an Unverified or Unchecked transaction status and you will not be notified when a MRB does not provide it.
We are immediately applying this change to the compliance rules in Massachusetts, Nevada, New York, and Oregon. In the coming weeks we will be reevaluating privacy language in other states, territories, and tribes to determine whether that rule should also be applied elsewhere.
We are going to reingest prior sales data from MRBs in affected states to eliminate any confusion going forward and to ensure a consistent historical record.
Supporting Compliance Efforts
Here are some suggestions to consider:
- Have a discussion with your MRBs to underline the importance of making sure you’re able to fulfill all of your regulatory obligations by verifying that sales are made to eligible customers or patients and explore ways that they might be able to share that information with you for compliance purposes. You may want to clarify that Green Check checks for ID information in point of sale records solely to confirm that the customer or patient was eligible to make a purchase (they were of age or a medical ID was present) but the actual date of birth and other demographic data like name, medical conditions, email address, or any other form of personally-identifiable information is never shared with financial institution users.
- Send a questionnaire to affected MRBs asking them to acknowledge the importance of being able to demonstrate that they are not selling to those that are either ineligible (medical) or underage (adult-use) along with an attestation that they are meeting their ID-checking requirements as dictated by state/territory/tribal marijuana statutes, regulations, and guidance. Consider distributing this questionnaire on a regular basis based on your particular risk appetite.
- Request copies of employee training materials that both emphasize the importance of confirming patient/customer eligibility and provide them with the tools they need to determine whether someone is attempting to circumvent these rules.
- Do a site visit to confirm that all patients/customers are required to show ID to gain entrance to the dispensary facility and at point of purchase.
At the end of the day, it is up to you to decide how you want to address this issue but please know that we do not in any way mean to suggest that you shouldn't bank someone because their legal counsel have either interpreted the rules this way or they have been instructed to do so by a representative of a state regulatory agency through written or verbal communication.
Questions
If you or any of your supervisory bodies have questions about this change please don’t hesitate to reach out to us. You can always reach out to our customer support team at support@greencheckverified.com.