Looking back to 2020, we can see that Cannabis has become quite popular among people due to its medicinal properties. It would not be wrong to say that the cannabis industry is poised to expand in the coming years. With that being in mind, could this offer new aspiring entrepreneurs new business opportunities?
2020 saw several countries trying their best to legalize the use of Cannabis in the medical field. This might positively impact the market and help the cannabis market to expand. Despite the effort, Cannabis remains an illegal substance, and if anyone is found carrying Cannabis with more than 0.3% THC will be penalized.
The Value Of US Cannabis Industry
The market value of the cannabis industry in America is slowly rising, and it is expected that this industry’s market capitalization will reach $30 billion in 2025. You must also take FDA illegalization into consideration.
Hence, if Cannabis is legalized, we can expect a soaring rise in the market capitalizations. As the legalization movement of Cannabis reaches new states, many entrepreneurs have started businesses around cannabis payment processor.
Current Cannabis Payments Options
Out of all shops, only dispensaries have the authority to sell Cannabis that too with 0.3% THC or less. Despite being authorized, they have only a limited option for processing cannabis payments.
Here we have enumerated a list of payment methods and some considerations on what we think are currently the best option to make Cannabis-related payments.
1. Cash
Cash seems like the most viable option for making direct cannabis payments. However, if you are taking cash as the only option to make payments, there will be a time where you will find certain limitations.
If you see this method in the salesperson’s perception, only cash payments will limit the ability to upsell customers, and due to this, the cart size also limits itself.
2. Bank Transfers
Bank transfers act as a middle ground for the dispensaries that don’t want as much cash to manage their sales. This process uses ACH (Automatic Clearing House) and is referred to as bank transfers that happen electronically.
However, bank transfers come with a challenge. To do a bank transfer, both the seller and customers need to have a third-party solution. Currently, there are two popular third-party solutions: Hypur Pay and Can Pay.
3. Debit Cards
Although this might not be a common solution, there are people who use their debit cards to make cannabis payments. For most people, a debit card is the best option as it allows people to pay only from the money they have in their bank accounts.
The card reader will determine whether you have the sufficient amount to pay the bills. So, if you see from the back end perspective, it is similar to the ACH, but you are using a card instead of electronically transferring.
4. Credits Cards
Credit card payment is what most customers look for. Paying with the help of credit cards is easy for the customers to make smoother payments. In fact, more than 83% of the Americans between 30 and 50 years of age use credit cards to make most of their parents.
Unfortunately, in some places, you cannot use credit cards to make cannabis payments as the federal government is still legalizing the whole cannabis thing.
The Future Of Cannabis Payments Processing
You might find that the cannabis payment options are limited. Well, they are. However, the future payment might be different. With the current hype with all the legalization of Cannabis, legislative governments are looking for a banking solution for cannabis payments.
However, that doesn’t mean the payment procedure for Cannabis will become easy all of a sudden. Even with the legislation, banking will not be easy.