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Cannabis is still being regulated as a high-risk industry due to its Schedule 1 classification from the federal government. Even in states where it is legalized, cannabis-related businesses (CRBs) face an uphill battle to bring their products to consumers, often having to jump through legal and operational hoops to make sales and keep their paperwork in order. Whether you’re a grower, testing lab, or dispensary, these issues arise at every level of the industry.
One of the most common issues is not being able to accept credit card payments for cannabis products.
Major credit card companies and payment processing companies like QuickBooks, Stripe, and Square prohibit transactions related to federally banned substances. Those who attempt to process credit cards risk getting their payment processing shut down or “deplatformed”. As a result, businesses are left to find financial workarounds in order to accept payments.
Vanishing Money
Even businesses that have been accepting credit cards for years, like CBD dispensaries, can get deplatformed when they break into the THC space. Once a payment processor becomes aware of a business selling cannabis products, they can immediately terminate their services.
One minute your business is processing payments like normal, and the next, your payment processing partner cuts off your service — preventing further credit card transactions and vanishing the tens of thousands of dollars you had tied up in escrow.
It’s a horror story that has happened to businesses in the industry, and even companies that don’t work directly with cannabis products can get caught in the crossfire.
An Industry-Wide Problem
Level 1 businesses, companies that touch the cannabis plant itself, are especially at risk for deplatforming. This includes growers, cultivators, transportation companies, testing labs, and dispensaries, but even companies that interact with Level 1 businesses can be affected.
For example, a company that sells agricultural watering equipment could run into the same deplatforming issues if they are doing business with a cannabis grower and are naming or marketing their equipment as for the cannabis industry.
Financial softwares use AI tools to automatically flag these ancillary products and services as cannabis products, even if they are only tangentially related to cannabis. Being flagged in this way can result in financial softwares terminating their services with the business, leaving them scrambling to perform basic financial responsibilities like payroll and record keeping.
How to Accept Digital Payments Without Getting Deplatformed
Many in the cannabis industry operate as cash-only businesses to avoid the potential risks and hazards of trying to accept credit cards. Naturally, this is an imperfect solution that creates more hassle for customers and businesses.
However, a workaround called Green Card has stepped in to fill the gap left by traditional payment processors in the industry.
Green Card is a secure and compliant digital wallet that allows customers to instantly pay for cannabis purchases using funds linked directly from their bank account. This allows businesses to reduce cash transactions and provide a better customer experience while staying legally compliant and avoiding the risk of getting deplatformed.
Other Benefits of Green Card
Besides the obvious benefit of allowing cannabis businesses to accept digital payment, Green Card offers many other advantages, including:
- Invoice ID allows you to track from seed-to-sale for Metrc reporting (in Minnesota)
- Integrates with QuickBooks and other financial software
- Sends and manages invoicing to customers
- Deposits money into your bank account instantly
- Vending machine payment options are available for Nevada and California
- Provides email and SMS marketing functionality
Getting Started with Green Card
Evolve Payment has been helping businesses with merchant processing for over 20 years. We are excited to bring Green Card to our clients as a fast, reliable, and compliant method to process digital payments.
As a member of SotaCann, we are connected to a statewide network of Minnesota cannabis professionals focused on education and industry growth. We stay current on the latest laws, regulations, and technologies in the industry and pass that expertise along to our clients.
If you’re ready to start streamlining your cannabis business and improving your bottom line, give us a call or book a demo today.
651-628-4000