Steve, a cancer patient in California, hits up his dispensary and asks for half an ounce of high-THC marijuana to calm his pain and stimulate his appetite, recently gone thanks to chemotherapy. He rarely leaves his house now; his sickness is still debilitating.
His bank account looks fine, funded, but his cash reserve at home is scarce; he has not gone to the bank, two miles away from his home, in a few weeks. He’s not lazy; he just can’t do it yet. He’s still recovering from a very aggressive treatment.
The dispensary’s delivery girl shows up at his doorstep. The ticket’s $140. He looks at his wallet, there’s only $80. “Can I pay with Visa?” he asks, assuming that, if one can pay a $5 burger with a card, one can certainly use it to complete a three-digit transaction. The girl, in her mid-20s, laughs.
“Of course you can’t; it’s weed.”
How is it possible that a cancer patient cannot get his medication because companies like Visa Inc V, Mastercard Inc MA, American Express Company AXP and even Paypal Holdings Inc PYPL, do not service the legal, medical cannabis industry?
This is a real issue in the marijuana industry. It’s called “the cash problem.” And it’s not about a lack of cash, but rather about an over-abundance of it. Most cannabis businesses out there can only transact in cash, because not only credit and debit card issuers refuse to service them, but so do most traditional financial institutions.
A Solution Is Emerging
Last year, Benzinga shared an exclusive interview with Dustin Eide, CEO of CanPay, a tech platform that enables debit payments at marijuana dispensaries. The methodology is a bit unorthodox, but it works.
All a consumer has to do is download the CanPay app from http://www.canpayapp.com and install it in his/her Apple Inc. AAPL iOS or Alphabet Inc GOOG GOOGL Android device. Once inside the app, the user links their checking account and, whenever a payment needs to be completed, requests a unique, single-use and expiring-if-not-used token with no identifiable financial information that will be used to pay for the product or service in question. The transaction will then show up in the customer's bank account history, as any other purchase — just like a McDonald's Corporation MCD debit would appear.
Sounds complex, but it’s the closest cannabis users can get to a non-cash payment that does not involve cryptocurrencies like Bitcoin or Potcoin or blockchain solutions.
Luckily for California medical marijuana patients, especially for those close to Oakland and San Jose, Harborside, — the largest medical marijuana dispensary chain in the United States, boasting more than 200,000 registered patients — has partnered with CanPay to offer this debit payment solution to all of its patients having cannabis flowers and/or products delivered at their homes.
“All Harborside delivery drivers at both its locations (Oakland and San Jose) now have a device that can accept CanPay transactions on them, allowing patients to use this option, if they desire to,” Eide told Benzinga during a recent conversation.
Currently, CanPay is only accepted for deliveries, but not for in-store transactions. “The priority for Harborside was to offer an opportunity for patients who are accepting delivery, to have a cashless option. Until now, it was cash-only and there wasn’t a workable solution for them to de-cash that transaction,” Eide added. “There’s a reason these patients are receiving cannabis at home. While some opt for delivery for convenience, others are not able to leave the house and go to an ATM to get the cash they need to receive their delivery.”
It is anticipated, however, that CanPay will be accepted in Harborside stores soon.
Users should note that Harborside operates under its own DBA name, which means that the transactions will show up in their bank account transaction history with the Harborside name next to them. “This is a form of legitimacy and transparency,” Eide explained. It is, nonetheless, understandable when patients don’t want this to show up in their account summary. But, the road to normalization of cannabis consumption is not evenly paved.
“It’s an honor to be selected by an industry leader like Harborside. They obviously have a thorough vetting process whenever they review technology they want to employ,” CanPay’s CEO concluded.
CanPay is not only available at Harborside, but also in another 50 locations in six states in the U.S.
Note: CanPay Debit has no relation with Canada’s CanPay Payroll Software Online. _______ Image Credit: Javier Hasse
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