What Happens When You Use Plastic For Weed
Bloomberg Businessweek|April 04, 2022
A pot purchase at a legal dispensary may show up as an ATM withdrawal (wink, wink)
By Pat Regnier. Illustration by Molly Dyson
What Happens When You Use Plastic For Weed

The McDonald’s in Great Barrington, Mass., had hired extra employees to keep up with the flow of hungry customers from a marijuana shop nearby. What its managers didn’t realize, on a Saturday afternoon in December, was that the payment processing technology at the dispensary was misidentifying a purchase of pear-flavored THC chews as a withdrawal from an ATM—at the burger joint’s address.

The dispensary, Theory Wellness, didn’t know about the wrong address either. But why did the purchase show up as a cash withdrawal? Theory’s payment machine, which looked to a customer a lot like a card reader at a coffee shop, was in fact running a so-called cashless ATM. Instead of spitting out $20 bills, the machines work with software that programs them to send signals down debit rails, where they eventually run through a sponsor bank before triggering a sweep of funds from a customer’s account to the store’s. Still, the bank saw the sale of edibles as a cash withdrawal and reimbursed its customer the $2.75 they paid to use a debit card, just as it would have for an out-of-network ATM.

This story is from the April 04, 2022 edition of Bloomberg Businessweek.

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This story is from the April 04, 2022 edition of Bloomberg Businessweek.

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