Bridging the Gap: Revolutionizing Cannabis Transactions with Innovative Payment Solutions

1/11/20243 min read

In the realm of everyday transactions, credit cards have become an integral part of the American consumer experience. However, the cannabis industry presents a unique challenge, catching many casual consumers off guard as dispensaries do not accept credit cards due to the federal illegality and Schedule 1 classification of cannabis. Major credit card companies, including VISA, MasterCard, and American Express, currently prohibit credit card transactions for cannabis-related purchases.

This cash-only system poses significant challenges for both consumers and businesses alike. Carrying large amounts of cash can be inconvenient and unsafe, leaving consumers vulnerable to theft and dispensaries at risk of robbery. Additionally, the lack of electronic payment options hinders the growth and development of the cannabis industry, preventing it from integrating with mainstream financial systems.

However, innovative payment solutions are emerging to bridge this gap and revolutionize cannabis transactions. These solutions leverage technology to provide safe and convenient alternatives to cash payments, offering a much-needed solution for consumers and businesses operating in the cannabis industry.

Navigating the ATM Loophole: A Closer Look at Cashless ATMs

A significant development in late 2021 sent shockwaves through the cannabis industry when Visa issued a stern statement titled "Cashless ATM" and Misuse of ATM Transactions Prohibited. The statement highlighted that cashless ATMs were marketed to merchants facing payment service unavailability due to various reasons, including legal/regulatory concerns. Visa warned that supporting this scheme jeopardizes the integrity of VisaNet and the Plus network.

As a response to this impending crackdown, cannabis retailers nationwide have been seeking alternatives to cashless ATMs since their closure at the end of 2022. Previously, dispensaries utilized this workaround, rounding transaction totals to a flat amount and providing cash back to customers, ultimately resembling a cashless ATM. However, Visa's warning prompted the shutdown of this method.

The Compliance Conundrum: Unmasking the Challenge in Cannabis Transactions

Processing cannabis transactions with a PIN debit card violates the policies of payment card networks for the time being. The most common struggle is forcing your customer to pay $3.50-$5.00 to withdraw their cash. What most companies won't disclose to you is that an out-of-network charge brings another $3.00 on average to the customer. Your customer then faces anywhere from $6.50-$8.00 in fees to make their purchase. Cashless ATMs, although a workaround, permit dispensaries to accept debit card payments indirectly by allowing customers to withdraw cash from their bank accounts. This proves to be a solution for most dispensaries. Now lets unpack how many business owners are working around the PIN Debit debacle.

Introducing a Compliant Credit Card Program: The Canna Brothers Venture Solution

In response to the challenges posed by traditional credit card companies, Canna Brothers Venture introduces a groundbreaking credit card program designed specifically for the cannabis industry. Our program ensures compliance through:

  1. Security, Tracking, and Reporting: Robust features that guarantee the security and transparency of each transaction.

  2. Partnership with Licensed Merchants: We collaborate exclusively with properly licensed merchants, ensuring alignment with state and local regulations.

  3. Transparent and Audit-Ready Platform: Our system operates on a transparent and audit-ready platform, providing a seamless and compliant transaction environment.

  4. Blockchain-Secured Technology: Utilizing a "Single Use, closed-looped" e-Wallet ecosystem that is PCI/SOC compliant and blockchain secured, ensuring no violations of card brand rules.

  5. Open Support from Multiple US Banks: The only solution openly supported by multiple US banks, emphasizing transparency, tracking, and compliance through blockchain technology.

Conclusion: Paving the Way for Secure and Compliant Cannabis Transactions

Canna Brothers Venture's credit card program emerges as a pioneering solution to the longstanding credit card conundrum in the cannabis industry. Our commitment to compliance, security, and transparency sets the stage for a transformative era in cannabis transactions, bridging the gap between regulatory challenges and the evolving needs of consumers and merchants alike.