As Marijuana Sales Grow, Startups Step in for Wary Banks
nytimes.com
nytimes.com
0. http://www.huffingtonpost.com/2014/02/25/colorado-releasing-...
Wait what?
Storing the records in the Bitcoin blockchain sort of puts them above reproach with regard to certain accusations.
Tokken is basically acting as an intermediary between dispensaries and banks, so that banks do not have to shoulder the liability of potentially laundering money. They let Tokken take on that liability instead, and absolve themselves of much of the risk. Plus they only have to conduct due diligence on one organization, rather than a bunch of disparate dispensaries. Tokken gets paid some cut of the revenue that flows through them to the banks. Let's walk through how this will probably work:
Tokken faces the problem of making sure that every transaction they pass on to the banks is completely legal. They can only do this by verifying every Tokken user to make sure they have possession of a current, legal marijuana card at the time of each purchase. Only those with valid credentials will be allowed to use the payments network, otherwise the transaction will be rejected and will not be sent on to the ACH for bank settlement.
A verified patient will link their credit/debit card to their Tokken account, which will track their purchasing behavior (rejecting any illegal purchases, such as too many purchases in a month, or exceeding a certain purchasing limit, etc.). They could also integrate some of the other double-checking solutions mentioned in the article: GPS tracking of each purchase tied to each user, kiosks to accept cash from Tokken card-holding users. The Tokken network will pass valid purchases along to the ACH for bank/credit card account settlement.
At this point, the transaction is verified and should be considered legal enough to not trigger any money-laundering alarms. But banks still can't be 100% sure that Tokken is not simply dipping into its own database to combine valid/invalid transactions, passing dirty money that looks clean up the chain. If Tokken timestamps each transaction on the Blockchain (using some public wallet and transaction ID scheme), this adds another (large) level of security for the banks as they can verify the timestamps generated by each purchase of a user on the Tokken network.
This is not foolproof either, as Tokken could claim the Bitcoin transactions are generated automatically, but could theoretically go in and generate them at will to match doctored accounting records - not likely at high levels of transactions, but still possible.
Ultimately, timestamping each purchase is actually useful if Tokken can prove that it is automatic and that the company does not interfere with the mechanism in any way.
I imagine the banks view dealing with this type of business as high risk. I also imagine that there's a substantial amount of work to maintain legality in this type of business, monetarily. I read the things you cited as merely saying this guy has the background to be capable of putting in the work to maintain legality, potentially lowering the risk of involvement for banks. Maybe I'm misinterpreting.
See, this is the weak point of voting systems on websites. You don't actually know why you've bern ____voted, and asking is liable to backfire.
These studies are flawed. They are based on the person telling the truth about their drug usage.
"Do we call those who grew and sold pot to feed their families entrepreneurs, are they idolized in think pieces?"
What about the people that sell guns to feed their families?
"The entire industry has been whitewashed and is still prey to the same racist fears that spurred its prohibition in the first place."
You must be smoking weed, because this is the most ridiculous thing I've ever heard. Nobody is still attributing weed to only non-whites.
Look at how weed is characterized in movies and TV: white, dopey, college kids.
If someone sold guns when they were illegal and then jailed and then guns made legal, I would say they were wronged by society and should be released from their incarceration.
>Look at how weed is characterized in movies and TV: white, dopey, college kids.
Exactly - whitewashing. Marijuana usage is marketed as fun and carefree while ignoring the reality that many, many people are still in jail for crimes that are now business plans.
My whole point is that a large amount of those who were essentially the marijuana industry prior to its legalization are minorities who are disproportionally jailed and the industry is now run by mostly white people who get to reap the rewards. Legalization is seen as a win for personal liberty yet there are still so many in jail.
I would like to see a startup / org that worked towards social justice for these prisoners using the money earned from legalized weed sales.
Repealing mandatory minimums and revising sentences is something I could get behind. Not because marijuana law has changed, but because they were given unjust sentences in the first place.
The principle "if one in jail for an offense which is later legalized, one should be released" would only lead to freeing Capone with the end of prohibition if tax evasion were legalized at that time, which it was not.
If, instead, the principle "if one in jail because one was prosecuted for an offense other than the one primarily motivating the government to seek to jail you because they had insufficient evidence for the offense that is the prime motive, and the offense that is the prime motive for the government seeking to jail you -- even if it is not the one you were convicted of -- is legalized, then you should be released for jail", well, then Capone would only be released with the end of prohibition if murder were legalized at that time.
I don't think any principal which would lead to Al Capone being released when prohibition ended was either proposed or implied upthread.
Besides, do most modern day drug dealers accurately report their earnings to the IRS? Would you actually support prosecutors who aimed to convict drug dealers on on tax fraud because they knew you were about to pardon all drug offenses?
And yes I agree with you wholeheartedly that the sentences were unjust in the first place. It is my hope that legalization will steer people to reconsider the excessive harshness and implicit racial bias of drug laws e.g. crack cocaine users receiving larger sentences than those caught with powder.
Al Capone was famously only convicted of tax evasion, so I'm not sure this is relevant. And bootlegging wasn't what made him "Public Enemy #1", it was the violence he used to run his gang. Those actions would still be crimes without prohibition.
The US is fairly unique among Western countries in that the repeal of a law doesn't automatically end the sentences of people convicted of breaking it (AFAIK - this came up here on HN in the last few months).
It's not ok to be uncivil on Hacker News. We ban accounts that do this repeatedly, so please don't do this.
We detached this subthread from https://news.ycombinator.com/item?id=11120194 and marked it off-topic.