Across the legal cannabis space, banking has been a consistent thorn in the side of dispensary operators on both the medicinal and recreational side of the growing market. And while most banking institutions are still skittish about supporting an industry that is still illegal in the eyes of the feds, one multi-state medical marijuana operator is taking financial processing into its own hands by creating one of the industry’s first dispensary credit cards.
According to new reports from the Chicago Tribune and the Motley Fool, New York-based Columbia Care rolled out their Columbia National Credit (CNC) Card on a trial basis for Empire State patients late last year and immediately saw positive results. Now, the company will expand the program to its dispensaries and patients in Pennsylvania, Delaware, Arizona, and Illinois.
In New York, patients who signed up for the dispensary credit card increased their in-store purchases by 18%, while home delivery orders spiked by 25% every month, with those orders averaging 40% higher check totals than the average in-store order.
“We have an industry where people have to use their debit cards or ATMs or cash to make purchases. It’s like 1974,” Columbia CEO Nicholas Vita told the Tribune. “We’ve seen what happened when we introduced access to this capital, and it has a huge impact in giving patients access to the products they need and want.”
At participating Columbia Care dispensaries, patients can see if they qualify and apply for a CNC Card on tablets next to where they place their cannabis orders. Most patients are able to use their card during that same dispensary visit.
To work around the federal blockades that have hindered the nation’s major banking institutions from taking cannabis money, Columbia has partnered with local financial institutions in each of the 12 states that it operates, as well as Washington DC and Puerto Rico, with plans to bring the CNC Card to every market where they are licensed to operate.
“This has always been an issue that has plagued the cannabis industry,” Morgan Fox, spokesperson for the National Cannabis Industry Association, told the Tribune. “Since people have been looking for viable alternatives, people have been trying to fill that gap in lieu of better federal policy.”
Outside of dispensary credit cards and waiting for the end of federal prohibition, cannabis industry insiders have also pushed for e-payment processing or a blockchain system to escape the industry’s current banking conundrum. But save those limited options, the cannabis industry at large is still primarily restricted to cash payments.
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