Legal
Crowdfunding Site Reverses Fire Fund for CA Cannabis Growers
WePay has reversed the funds raised by the California Growers Association, in what cannabis industry insiders are calling undue discrimination.
Federal prohibition continues to exacerbate the pain of cannabis farmers who have lost everything in the Northern California fires that continue to burn and have killed 42 people, burned thousands of homes and scorched a hundred thousand acres of land since Oct. 9. The federal illegality of cannabis has made crop insurance inaccessible for farmers — and now, the banking limitations on the cannabis industry are impacting the community’s crowdfunding efforts to support farmers.
On Monday, the California Grower’s Association announced that their relief fund on the YouCaring platform had all of its donations reversed, effectively sending back all the money the CGA had earned.
CGA Executive Director Hezekiah Allen took to Facebook to share the bad news with supporters and friends.
“Was just informed by the payment processor for the wildfire relief fund that they have reversed the payments because they can’t process ‘cannabis transactions,’” Allen said. “I didn’t realize contributions to wildfire recovery were considered ‘cannabis transactions.’”
The takedown letter Allen received on Monday claimed he had broken the platform’s Terms of Service and would no longer be able to access YouCaring’s payment processing platform WePay or the $10,000 the campaign had raised at that point, which was supposed to help victims of the devastating wildfires across the state that have been burning for a week. YouCaring elaborated further,
“More specifically:
Current U.S. federal law prohibits the purchase and sale of cannabis and cannabis extracts. Subsequently, WePay is unable to process payments connected to the production, sale, or consumption of cannabis, even in situations where such activities would be permitted under state law.
Thank you for understanding and we apologize that we couldn’t offer a better solution.”
We reached out to YouCaring to find out how supporting a wildfire fund coordinated by an industry trade group that as an entity doesn’t touch the plant might be construed as a cannabis transaction that would be against the law. YouCaring was quick to point out that WePay was to blame for the reversal.
“YouCaring did not shut down this fundraiser, WePay suspended the account,” YouCaring Head of Communications Camelia Gendreau told Cannabis Now in an email. “The fact that you can still see the fundraiser on our website tells you that we didn’t shut it down — when our trust and safety team takes down a campaign, it disappears from our website completely.”
Gendreau then noted this wasn’t not meant to be a swipe at cannabis. “While YouCaring support[s] all forms of treatment and most fundraiser types, our payment providers (WePay & PayPal) do not allow fundraisers for anything marijuana-related, including for medical reasons,” she said.
When Gendreau was asked again how the fund might be construed as a cannabis transaction, she responded, “That’s really a question for WePay. The campaign is still up on YouCaring, so the proof is in the pudding, so to say.”
When asked about how this fund could be seen as criminal activity Jeremy Milk of WePay gave a confusing answer.
“To comply with federal law and related government notices, WePay’s bank and card association partners prohibit us from processing payments related to marijuana,” he said. “This means we can process payments for campaigns to support growers’ families, but not to support their cannabis crops. We recognize that enforcement of our Terms of Service may impact some campaigns, yet we must comply with federal laws.”
We pointed out to Milk the funds raised haven’t been claimed as some kind of replace-the-weed fund. He replied, “The campaign organizer specifically noted, ‘Recovery will be especially difficult because cannabis is a dramatically under-insured crop, growers can’t get loans and won’t qualify for federal recovery funds.’”
According to Milk, WePay interprets this campaign statement to mean that the funds will support the cannabis crops, for which there is no insurance, loan or federal relief. If the organizer were to state clearly and unambiguously that the campaign will support persons adversely impacted, the platform would very likely be able to start processing their payments.
Morgan Fox of the D.C.-based Marijuana Policy Project said that it’s not abnormal for crowdfunding websites to shut down campaigns somewhat related to cannabis.
“This sort of thing isn’t unheard of, and I guess I can understand their fear of possibly being accused of money laundering or some other federal crime,” said Fox. “However, I have never heard of a legitimate charity being penalized or prosecuted for taking money from the cannabis industry.”
“Frankly, I think it is ridiculous that this donation was reversed, particularly since cannabis growers have been hit very hard by this tragedy,” Fox said.
Fox says in cases like this, he’s seen industry actors that want to do charitable activities and give back to the communities that support them have been forced to do the work themselves or form their own independent charities. “Just another example of discrimination on the part of the system breeding innovation from the cannabis community,” he said.
This independent fundraising is exactly what the folks at CannaCraft have done to help facilitate their ongoing relief effort. They’ve already offered up their facility as a regional command center for The Red Cross. However, because the fire recovery will be a long process, CannaCraft is making sure their ongoing fundraising doesn’t face similar issues by setting up their own non-profit.
Kial Long, CannaCraft’s Vice President of Marketing, told Cannabis Now in an email that they are “currently working on setting up a non-profit organization to collect donations for growers who lost their cultivation sites and/or were severely impacted by the fires.” Long said that CannaCraft is currently “talking to a couple of large cannabis brands in California to help assist us in that fundraising.”
For more coverage of the fires in Northern California, read our in-depth coverage here.
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