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Master Agent Agreement Offers Payment Processing for Legal Marijuana Sales
Payment processing headlines are pretty typical in the tech field when it comes to Master Agents and the agreements they make with various businesses. We tend to see this more with service carriers, but two companies recently entered into an agreement in which one executed a Master Agent agreement with the other, and the transactions will deal with legal medical marijuana.
"Fortitude Group, Inc. CEO Thomas J. Parilla is pleased to announce that on Feb. 22, 2014, the Company executed a Master Agent Agreement with eViteXchange.com. Under the terms of the agreement, Fortitude will offer and facilitate closed-loop transaction processing to legal dispensaries in the medical marijuana industry as well as provide processing for entities in states that have legalized recreational marijuana sales,” per Fortitude’s announcement.
In just recent weeks, hundreds of entrepreneurs have applied for dispensary licenses in Oregon, reflecting high levels of interest in the state’s emerging regulated medical cannabis industry. So, is this a keen business move on the part of Fortitude? This is one subject that has a lot of gray areas.
For one, the application process alone is costly, with some states requiring $4,000 just to fill out and file a piece of paper. Then there is the red tape, because even in legal states, some municipalities are enacting zoning laws that restrict locations of dispensaries and grow centers. There are the landlords who might not want their tenants involved in the marijuana business, so start-up costs for a dispensary or grower might have to include the purchase or construction of a building, rather than renting.
All that aside, Fortitude and eViteXchange.com see a benefit to this partnership in an industry that is still too new and perhaps uncomfortable for traditional entrepreneurs. For Fortitude as Master Agent, there are no hurdles or forms or red tape, just transactions, which could mean a solid cash flow.
On the business side of things, the terms of the agreement are extremely beneficial to Fortitude and its shareholders. As all revenues pass through the company, 92 percent will remain with Fortitude with a small royalty payment of 8 percent based on the wholesale price being paid to MariMedical. This is all according to Fortitude. MariMedical produces "MariMist,” a medical marijuana product.
The news release states that Fortitude shall acquire 420banc.com and 420cashcard.com from eViteXhange.com. Both domains will be used as a pre-paid platform, which will facilitate legal marijuana merchant customers to process transactions using a debit card instead of the tried and true green (the paper money kind).While this is not your typical Master Agent news brief, it’s certainly a sign of the times. It’s expected there will be a lot of legal loopholes as this news progresses.