Progress happening in cannabis payments sphere

The Biden Administration's move to reclassify marijuana from Schedule I to Schedule III under the Controlled Substances Act represents a monumental shift in federal policy. Announced May 16, 2024, this proposal by the Justice Department aims to align federal drug policies with the growing acceptance and legalization of cannabis at the state level.

This change and an updated version of the SAFE Banking Act introduced in the Senate in September 2023 highlight an evolving stance that could significantly impact businesses operating in the cannabis sector, particularly banking and payment processing services.

Companies processing payments for cannabis-related businesses have long navigated a complex regulatory environment. Despite legalization in multiple states, the federal illegality of cannabis has deterred major financial institutions from serving the industry, fearing legal repercussions. This has forced many cannabis businesses to operate on a cash-only basis, creating risks and inefficiencies.

Proactive in the face of challenges

Recent developments from companies like Organic Payment Gateways, Shield Compliance and CanPay demonstrate the industry's proactive approach to overcoming these challenges. Organic Payment Gateways launched a new Authorize.Net payment gateway solution tailored for the CBD, nutritional supplement and Farm Bill-compliant cannabis seed industries.

This service addresses the need for reliable payment processing by offering solutions that integrate seamlessly with major ecommerce platforms like WooCommerce and Shopify. By ensuring that these gateways are properly configured for high-risk industries, Organic Payment Gateways provides a crucial service that enhances operational efficiency and compliance, the company stated.

Shield Compliance is responding to the market with organizational changes aimed at bolstering its position as a leader in cannabis banking compliance. According to the company, the promotion of key team members and enhancement of product offerings reflect its strategic adaptation to the thorny regulatory landscape.

The compliance platforms Shield Assure and Shield Engage offer solutions that help financial institutions navigate the intricacies of banking for cannabis businesses, emphasizing the importance of robust compliance frameworks in fostering sector growth, Shield Compliance added.

Innovations online and in-store

CanPay has continued to expand its offerings with the introduction of RemotePay. This new feature, CanPay stated, allows consumers to prepay for their cannabis purchases online, reflecting a significant advancement toward integrating cannabis retail with conventional ecommerce practices. By leveraging the ACH network, CanPay ensures a secure, transparent transaction process, which is crucial in maintaining the integrity and trustworthiness of financial operations within the industry, the company noted.

Furthermore, the collaboration between Surfside and BLAZE to enhance the cannabis retail experience through advanced advertising technology underscore the sector's rapid technological evolution, the partners said. By integrating advertising directly into ecommerce platforms, these companies are striving to not only improving revenue streams for retailers but also enhance the consumer shopping experience.

With the federal government moving toward reclassifying cannabis, industry observers have predicted not only greater financial inclusivity but also less fear of federal reprisal, which is expected to catalyze growth and transformation in the cannabis sector. Companies that continue to innovate and adapt will likely lead the charge toward a more integrated, efficient and legally compliant cannabis market.

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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