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Hawaii says its 1st state to go cashless for marijuana sales

This file picture taken on October 8, 2007 in London shows a cannabis plant. Britain is to raise the legal classification of cannabis due to the growing prevalence of the potent skunk form of the drug, despite expert advice against doing so, the interior minister said Wednesday May 7, 2008. Home Secretary Jacqui Smith told parliament she would press for cannabis to be re-classified in law as a Class B drug compared with its current, less serious Class C classification. AFP PHOTO/Leon Neal/FILES

HONOLULU — Hawaii said Tuesday that it will be the first state to require marijuana sales to be handled without cash, saying it wanted to avoid robberies and other crimes targeting dispensaries.

Medical marijuana dispensaries in Hawaii won’t be allowed to accept cash beginning Oct. 1 and will require people to use a debit payment app instead. The app is already an option for marijuana transactions in six states, including California and Colorado.

Many marijuana businesses use cash because banks fear pot money could expose them to legal trouble from the U.S. government, which regulates banking and still bans marijuana.

The debit app called CanPay uses a Colorado-based credit union to facilitate transactions. Some mainland credit unions have opened accounts for cannabis businesses.

DALY CITY, CA – APRIL 18: Leaves of a mature marijuana plant are seenin a display at The International Cannabis and Hemp Expo April 18, 2010 at the Cow Palace in Daly City, California. The two day Cannabis and Hemp Expo features speakers, retailers selling medical marijuana smoking paraphernalia and a special tent available for medical marijuana card holders to smoke their medicine. Voters in California will consider a measure on the November general election ballot that could make the State the first in the nation to legalize the growing of a limited amount of marijuana for private use. (Photo by Justin Sullivan/Getty Images)

Hawaii was among the first states to legalize medical marijuana in 2000 but the state didn’t grant licenses to any dispensaries until last year. Maui Grown Therapies became the first to open last month after the state Department of Health gave it approval to begin sales.

During the Obama administration, the Justice Department issued guidelines to help banks avoid federal prosecution when dealing with pot businesses in states where the drug is legal.

But most banks don’t see those rules as a shield against charges that could include aiding drug trafficking. And they say the rules are difficult to follow, placing the burden on banks to determine if a pot business is operating within the law.

A rise in the use of medical marijuana has spurred a debate about organ transplantation, and it’s changing some laws across the nation.

There is also uncertainty over how the Trump administration will react. Attorney General Jeff Sessions has said he wants to crack down on the legal marijuana industry.

Credit card companies like Visa and Mastercard say they won’t allow their cards to be used to buy cannabis or marijuana-related products.

Patients who don’t own smartphones will have to create CanPay accounts with an email address and personal identification number. Patients will be able buy pot by logging on to their accounts with computer tablets at the dispensaries.