Cash has always been the king of cannabis. But many dispensaries are expanding the way customers can pay for their medicine. Some now accept debit and credit card payments, shifting away from the stereotypical portrayal of an exchange of hushed words and crumpled bills. Still others are even taking a leap into the marriage of cryptocurrency and cannabis.
Inevitable federal legalization and widespread cannabis use are expanding payment choices, leaving cannabis users shocked at the ease of paying for cannabis as easily as a bottle of wine at Target.
Cash is King: Why?
For years, users have known the cannabis industry as a cash-only business. When obtaining cannabis illegally, using cash can provide a layer of security and anonymity. However, many states have legalized medical and recreational cannabis use — so why do some dispensaries still struggle to accept anything other than cash?
Some might think that these cannabis merchants are stuck in the past. But it’s not the dispensaries that hold the cannabis industry back. It’s the lack of proper banking laws. Cannabis is still federally illegal, which makes some financial institutions wary of working with cannabis companies.
Cash-only mandates make cannabis purchases more complicated for cannabis companies and their customers. Though dispensaries still pay taxes on their income, cash transactions are harder to track and report. Additionally, dispensaries that hold a high volume of cash are often at a higher risk for robbery.
Give Credit and Debit Their Due
As cannabis legalization spreads from state to state, more dispensaries are finding success with cashless payments. According to CreditCards.com, a credit card marketplace, these dispensaries provide onsite ATMs and work with electronic payment apps.
The dispensaries that accept credit and debit most likely do so through a third-party processing service, as many major card companies do not support cannabis purchases. In fact, Visa made a statement that its network would not permit cannabis-related transactions until federal legalization.
A Cannabis Credit Card?
Accepting credit and debit cards allows ease of purchase for the customer. But can still lead to sticky financial situations for the dispensary. Until federal lawmakers pass laws that allow for accessible cannabis banking, companies like the cannabis delivery service Eaze will face suspicion and discrimination in credit/debit transactions.
Columbia Care, a New York-based dispensary, has addressed this financial instability by creating their own credit card. The Columbia National Credit Card (CNC) made Columbia Care the first dispensary capable of directly accepting credit payments, according to Emerald.
Since then, CNC expanded the program from Columbia Care’s New York home to other states. However, these cards can only be used at Columbia Care locations, which makes the CNC far from a perfect solution.
Cryptocurrency: a Cannabis Miracle or Mystery?
Cryptocurrency, or crypto, was once perceived as the currency of criminals. Illicit transactions for illegal substances on the dark web using crypto have been the topic of many a crime show. But as crypto becomes more accessible (just look at how popular Bitcoin is), many are wondering if the marriage of crypto and cannabis can emerge from the dark.
Cryptocurrency transactions are often anonymous, which affords customers a similar sense of privacy as a cash transaction. Additionally, electronic payments reduce the amount of cash dispensaries must handle, store, and report.
Some innovative cryptocurrencies have tried to seize on this niche, resulting in coins like PotCoin, CannabisCoin, or HempCoin. However, industry operators rarely use these these cannabis-specific cryptos. As a result, they are largely considered unsuccessful so far.
Is There a Future for Crypto in Cannabis?
According to CryptoNews, in 2019 only 5% of the dispensaries in the U.S. were accepting cryptocurrency payments.
The limitations for the cannabis industry and cryptocurrency transactions are largely the same for other major retailers. Crypto is hard to use in-person, while regulations and riskiness make owning cryptocurrency even more complicated for dispensaries.
Bitcoin, the most accessible cryptocurrency, is slowly being adopted into the world of retail purchases. Some sites allow gift card exchanges for Bitcoin, while some retailers like Overstock and Newegg directly accept Bitcoin payments. As Bitcoin grows in popularity as a payment tool, there is no doubt that the cannabis industry will adapt as well.
Though cash is clearly the cannabis payment method of choice, one can imagine that federal legalization will open many doors for credit, debit, and crypto.