Michigan Gets Compliant Cannabis Payment Alternative with New Lüt-Frankenmuth Credit Union Partnership

By A.J. Herrington, Featured Writer

Compliant payments provider Lüt announced this week that Michigan cannabis consumers and businesses now have a new transaction processing option through its partnership with Frankenmuth Credit Union. Through the collaboration, Michigan-based Frankenmuth Credit Union will offer Lüt Reserve, Lüt’s closed-loop payment platform, as part of its Envy cannabis banking program.

The new partnership gives Michigan cannabis operators a reliable way to accept digital payments that is aligned with regulatory requirements, reducing cash handling and the risk of sudden shutdowns of non-compliant systems, including so-called cashless ATMs. At the same time, consumers benefit from faster transaction processing, cashback reward programs and fewer failed transactions at licensed dispensaries.

“As cannabis businesses scale and regulatory scrutiny increases, the need for dependable, purpose-built payment infrastructure has never been greater,” Mike Andrud, CEO of Lüt, said in a statement from the company. “Partnering with Frankenmuth Credit Union allows us to deliver a solution that financial institutions can stand behind and that business owners and consumers can rely on every day.”

The collaboration builds on Lüt’s broader compliance ecosystem, including a recently announced partnership with Safe Harbor Financial and programs supported by Green Check Verified. 

Deal Marks Entry Into Michigan’s ‘Innovative’ Cannabis Market

Andrud tells IgniteIt that the new partnership gives Lüt new access to Michigan’s cannabis market, which he says is “highly innovative, broad and diverse.” 

“It is welcoming to new entrants with creative ideas,” he says in a written interview. “Many new ideas coming from the Michigan market will find their way into the national mainstream.” 

Vickie Schmitzer, CEO of Frankenmuth Credit Union, says the partnership with Lüt continues the financial institution’s nearly five years of providing financial services to the cannabis industry.

“Frankenmuth Credit Union saw the needs within their membership and launched one of the first cannabis banking programs in Michigan,” she writes, adding, “The credit union proudly serves the cannabis business in the seed-to-sale process.”

Rescheduling Not an Issue in New Partnership

The new partnership between Lüt comes as the Trump administration weighs a proposal to reschedule marijuana under federal drug laws. But an executive order from the president calling on the Department of Justice to expedite the process did not factor into the new collaboration, both chief executives say.

“We welcome rescheduling, but the status quo for large banks and traditional card networks remains unchanged,” says Andrud. “Lüt was designed as a closed-loop system with no traditional card network content to be a compliant and stable payments solution for the industry. Lüt can take the cash completely out of the equation, with no shutdown risk, while helping merchants grow key growth channels such as eCommerce and deliveries.”

Schmitzer notes that Lüt’s services are designed to operate within the current regulatory environment, making rescheduling unnecessary for the new partnership to succeed.

“Until cannabis businesses are granted access to all the traditional banking and payment services that other regulated businesses are afforded, FCU will help them by providing access and information to compliant alternatives that are available to them,” she writes in a Q&A with IgniteIt.