As Massachusetts sharpens its focus on unclaimed property enforcement in 2025, cannabis retailers face a rapidly evolving risk landscape. State regulators and auditors are looking closely at the handling of gift cards, wallet credits, and loyalty points—demanding clarity around what is exempt, what must be reported, and how programs are structured to ensure consumer protection and reduce fraud.
The 2025 Regulatory Landscape: Why Unclaimed Property is a Hot Topic
Unclaimed property (also called escheatment) laws require businesses to remit unclaimed customer credit balances, including some types of gift cards and wallet funds, to the state after a period of inactivity. In 2025, Massachusetts and several other states are:
- Increasing audits of unused gift cards and loyalty balances
- Advancing anti-fraud rules
- Tightening due diligence and reporting requirements
For cannabis retail—already a tightly regulated industry—these developments present compliance traps that can trigger penalties, investigations, and negative publicity if not properly managed.
What Must Massachusetts Cannabis Retailers Track in 2025?
Gift Cards: Closed-Loop and State Exemptions
- MA Presumption of Abandonment: Under Massachusetts law, most gift cards valued at $100 or less are exempt from the unclaimed property (escheat) process (source).
- However, cards over that threshold—and certain other stored value instruments—can be considered abandoned property if they remain unused for more than two years after the end of the year issued (guidance).
- State law mandates gift card balances are redeemable for at least seven years (reference), with strict limitations on expiration and inactivity fees.
Takeaway: Most standard cannabis dispensary gift cards and wallet credits under $100 are exempt from escheat, but custom programs or third-party gift offerings may not be. Always review your program’s details and confirm its fit under Massachusetts law.
Wallet Credits and Refund Slips
- Merchant Credit Slips (from returns and not labeled as traditional gift certificates) must also remain redeemable for a minimum of seven years and can similarly be subject to escheatment if not claimed after two years of inactivity.
- Programs not clearly marked with a date of issue or that are structured in a way that blurs closed- vs open-loop definitions could slip out of exemption status (resource).
Loyalty Points: Current Restrictions and Ambiguities
- Adult-Use Loyalty Prohibitions: As of 2025, Massachusetts does not permit loyalty programs for adult-use cannabis customers (see Rise Cannabis 2025 Guide). Any existing, legacy medical-patient loyalty point programs must track points and associated store credits with the same care as gift cards, including tracking last activity dates and owner contact data.
- Medical Use: Medical dispensaries may maintain loyalty structures, but points and credits that convert to wallet balances or store credits should be treated as potentially escheatable property if left unused.
Takeaway: Inactive wallet funds and points-to-credit conversions for medical programs may trigger escheat rules. Adult-use retailers must not offer loyalty points; violating this can invite enforcement and jeopardize licensure.
Due Diligence: Notification and Reporting Deadlines
Massachusetts demands strict due diligence before reporting or remitting unclaimed property:
- Notice Requirement: For balances of $100 or more, a due diligence notice must be mailed via first class to the owner’s last known address at least 60 days prior to filing the annual report (see FAQ).
- Annual Deadline: Unclaimed property must be reported and remitted to Massachusetts Treasurer’s Office by November 1 each year (Sovos guidance).
- Documentation: Cannabis retailers must keep records of all notifications, returned mail, and owner responses, as these may be requested during audits.
Pro tip: Automate customer contact recordkeeping in your POS, and regularly export inactivity and breakage reports for review.
Audits, Enforcement, and Audit Risks in 2025
Regulators are expected to increase enforcement around:
- Breakage accounting (i.e., unused card balance "profits")
- Proper distinction between exempt (closed-loop, sub-$100) and non-exempt instruments
- Cash-back, inactivity fees, and expiration compliance
- Third-party gift and payment program structures
Auditors will be looking for:
- Documentation of all issued cards and wallet credits
- Detailed activity records for each account
- Owner contact attempts and due diligence evidence
- Accurate classification of exempt vs. reportable property
Penalties for non-compliance can include substantial fines, interest on late remittances, and—critically for cannabis licensees—regulatory investigations that can tie up operations and damage reputations.
Cannabis operators should review and update their point-of-sale (POS) and customer management systems to ensure:
- Ability to track last activity on all gift cards, wallets, and patient/store credits
- Owner contact data is collected and regularly updated
- Automated reminders and notifications for inactive accounts
- Reporting capabilities to segment instruments by amount, type, and last activity date
Systems should be mapped to distinguish clearly between what is considered closed-loop and exempt, versus potentially reportable property. Work closely with compliance staff and integrate unclaimed property tracking into your annual audit checklist.
Remember: Use only vendors and POS solutions with a proven track record in cannabis retail compliance and who update regularly for state law changes.
- Audit your current gift card and store credit programs. Verify which balances qualify as exempt and document your methodology.
- Immediately discontinue any non-compliant adult-use loyalty programs.
- Implement POS and accounting processes to track inactivity, send notices, and prep for the November 1 escheat deadline.
- Maintain accurate owner/contact data and document all communications as due diligence.
- Educate your staff—and train regularly on the nuances of Massachusetts unclaimed property in the cannabis space.
Final Takeaway: Staying Ahead of Unclaimed Property Compliance
In 2025, Massachusetts’ unclaimed property requirements for cannabis retailers are some of the strictest in the U.S.. Navigating exemptions, notice deadlines, and new scrutiny on fraud and consumer protections demands thorough, ongoing compliance.
Staying proactive is your best hedge against enforcement and penalty risks. For the latest regulatory updates, compliance resources, or support with your escheatment plan, visit CannabisRegulations.ai.
Stay compliant, stay licensed, and safeguard your business as Massachusetts unclaimed property law continues to evolve in the cannabis sector.
