Times are changing. Legitimate, fully transparent payment options beyond cash-only are becoming available for dispensary customers.
Stuck between state legalization and federal prohibition, cannabis businesses have historically been forced to be cash-only operations. Even for those with stable banking relationships, the decision by all major credit card and debit card companies to veto card transactions for this federally illegal substance put legitimate, transparent, cashless purchases out of reach. But recent events have caused businesses to find new solutions.
In an unprecedented move for the cannabis industry, Hawaii announced in September 2017 that the state’s newly opened medical marijuana dispensaries would be cashless by Oct. 1, 2017. The state adopted CanPay, a mobile debit app that provides cashless payment solutions for the cannabis industry, as the only state-approved alternative to cash transactions in Hawaii’s medical dispensaries. Despite some initial confusion about whether dispensaries could still accept cash (they can) and if offering the state-sanctioned cashless option was mandatory (not yet), the announcement garnered lots of attention within the U.S. cannabis industry.
Helen Cho, director of integrated strategy at Honolulu-based Aloha Green Apothecary, feels that CanPay provides patients who are uncomfortable carrying cash with an important, state-approved alternative. Roughly 10 percent of the dispensary’s transactions are through CanPay, and that’s with clientele predominately aged 55 years or older. “They like to stick by the rules; they like to do things that are legal. It was important that they had an option that they knew was sanctioned by the state,” Cho says.
Cash-only transactions don’t only affect how businesses operate, they also affect customers’ and patients’ convenience in making purchases. As the industry becomes increasingly competitive, the consumer experience is becoming increasingly important as well. Cannabis consumers are seeking the same ease and frictionless experience they enjoy when purchasing any other legal product.
Tim Cullen, CEO of Colorado Harvest Company, views traditional payment methods as a right for the industry and strives to provide them at the company’s three Colorado dispensaries. Each store accepts cash (there are ATMs on site) and the CanPay app as payment options. “I want people to have an alternative to carrying cash with them,” Cullen says. “In today’s society and economy, it’s actually quite rare that someone pays for something in cash outside of shopping in a dispensary.”
What the Future Holds
As the industry grows, options for cashless payment services will undoubtedly grow, too. With nearly a decade in business—and several service providers behind him—Cullen offers dispensary owners some sound advice: Vet cashless payment providers carefully, get your bank in on the vetting process and never do anything to jeopardize your bank’s trust.
“That relationship is one of the most important business relationships we have,” Cullen says. “We have been in situations in the last nine years where we did not have a bank account. It sounds like a fun reality TV show, but it’s a nightmare.” While legitimate cashless payment solutions are just one piece of the banking puzzle, they represent one less cause for sleepless nights for dispensary owners.
This article originally appeared on CannabisDispensaryMag.com.