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Legal pot risks associated with managing mountains of cash, but
they are not robust enough to support the unique needs
sales: a of these businesses.
It's going to take something like the SAFE Banking Act
billion-dollar for the card networks to accord legitimate cannabis
businesses the same standing as other legal businesses.
This may not happen immediately, but it will as public
opportunity support for legalization mounts. A recent Gallup survey of
adult Americans found nearly seven out of 10 (68 percent)
By Max Miller support legalizing adult possession and use of marijuana.
Paybotic While cannabis dispensaries are the most obvious
businesses in need of payment processing services,
he latest election results point to a rising tide the cannabis value chain is extensive. It includes tens
of support for marijuana legalization. With a of thousands of other businesses that require modern
majority of states now legalizing marijuana for electronic payment options—businesses such as growers;
T medicinal and/or adult recreational uses, and a testing labs; distributors; and companies selling cannabis-
real possibility of federal law changes, it's an opportune related products, like CBD products, hemp clothing, and
time for ISOs and merchant level salespeople (MLSs) to smoking and extraction devices.
start making plans for selling payment services that cater
to this burgeoning market opportunity. Prepare now for onslaught to come
ISOs and MLSs need to plan for this eventuality. A good
In November 2020, voters in four states overwhelming first step is to understand applicable laws in states where
approved ballot measures allowing for adult recreational there are cannabis businesses that are likely prospects.
uses of marijuana: Arizona, Montana, New Jersey and Then search out reputable partners that already serve
South Dakota. And voters in Mississippi approved a this burgeoning market. Here are some considerations for
medical marijuana initiative. This brings the tally of evaluating prospective payment processing partners:
states allowing some sort of legal marijuana use to 38; 14
states plus the District of Columbia have legalized adult • How long does it take to get clients up and running?
recreational uses of marijuana. Approvals shouldn't take more than a couple of days
and setups shouldn't be complicated.
President-elect Joe Biden said he favors decriminalizing • Can the company support current and emerging
marijuana on the federal level, and allowing sales of payment preferences? (For example, electronic
medical marijuana. And Vice President-elect Kamala check and ACH payments for B2B payments, mobile
Harris is a co-sponsor of the SAFE Banking Act, which payments for consumers, and online payments.)
would establish a safe harbor for banks and credit unions • Does it operate in compliance with current federal
that want to provide financial services to legal cannabis regulatory guidance on serving marijuana businesses,
businesses. That bill was approved by the House of such as the Department of Justice Cole Memo and
Representatives but has stalled in the Senate. Financial Crimes Enforcement Network anti-money
Multi-billion-dollar market laundering rules?
• Is the company, and its technology, nimble enough
The revenue opportunities from legal marijuana sales are to accommodate changing laws, regulations and
enormous, for purveyors as well as state tax collectors. consumer shopping preferences?
Legal sales, nationwide, this year are projected to reach
$15.8 billion, a 30 percent increase over 2019 sales, • Can it integrate easily and readily with POS and back-
according to Arcview Market Research, which keeps tabs end systems used by cannabis businesses?
on the market. Pot shops in Colorado, one of the first states • Does it provide critically important ancillary services?
to legalize marijuana, rang up more than $1 billion in sales Examples include robust risk management controls,
last year. Since marijuana was first legalized in Colorado chargeback prevention tools, and loyalty and rewards
in 2014, the state has collected more than $1 billion in taxes programs.
from marijuana sales.
• How good is the company's customer support? Can
The crazy thing is that many marijuana businesses the prospective partner be counted on to be at the
are stuck in the 20th century, only accepting cash from ready, no matter when clients encounter operational
customers, or relying on workarounds to card network hiccups?
restrictions on cannabis-related transactions. Many have
implemented cashless ATMs, for example, which route Max Miller is founder and CEO of Paybotic, a payment processing com-
PIN-authorized credit and debit card transactions through pany specializing in high-risk businesses, including cannabis businesses.
ATM networks. These solutions may eliminate costs and Contact him at max@paybotic.com.

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