Did Eaze Commit Payment-Processing Fraud?

Eaze, a cannabis-delivery service with an operating style similar to UberEats, has quickly become the delivery giant in the industry. However, as companies continue to grow, they are unfortunately still struggling to get banks on board with allowing credit card payments for THC products, regardless of the processors’ continuously growing acceptance of CBD. 

So, when Eaze’s earnings quadrupled since beginning to accept credit card payments, as reported by CannabisMD, suspicions from rival companies began to rise over the validity of the company’s payments system. 

Now, Toronto-based DionyMed is filing a lawsuit on behalf of Herban Industries, the cannabis company that runs Eaze’s rival delivery service, Chill, claiming that Eaze has been fraudulently hiding customers’ cannabis purchases when they use credit and debit cards. 

DionyMed is filing the suit under California’s unfair competition laws and is accusing Eaze of credit fraud, claiming that payments for cannabis delivery are routed through phony businesses to avoid credit card company rules against using their services to purchase cannabis. The 72-page complaint was filed earlier this month, laying out the company’s apparent plans to make it look like customers are buying pet supplies or outdoor gear rather than weed. 

According to the suit, cannabis purchases from the company are shown on customers’ bills from obscure websites with bare-bones designs that are in some cases identical to one-another.  

Eaze, however, has denied all accusations, alluding to them as an attempt by rivals to boost their own business. In a statement to Marijuana Business Daily, Eaze spokeswoman Elizabeth Ashforda referred to the entire lawsuit as a “thinly veiled attempt by publicly traded Canadian company DionyMed to gain an advantage through litigation, prop up their failing stock price and publicize their new delivery platform.” 

With the validity of these accusations remaining unknown while the case continues to progress, only one thing is certain: the U.S. is in dire need of federal banking reforms

Emerald contributor since June 2019

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