Although the cannabis industry is growing each year, with legalizations, normalization, and demand, the federal classifications of cannabis have not changed. Marijuana remains a schedule 1 drug under the Federal Controlled Substance Act, leading to cannabis business owners facing hardships regarding finances. One of the most common issues many businesses face around cannabis is payment services, from credit cards, cryptos, debit solutions, and cashless ATM’s, business owners are always seeking alternative solutions. Harry Brelsford of The CannaTech Group sits down with Jim Roddy of the RSPA to discuss alternative payment solutions in the cannabis space.
Video Transcription
Harry Brelsford
Welcome back to the Canna tech Podcast. I’m with Jim Roddy from the RSPA. Good morning, Jim.
Jim Roddy
Hey, good to see Harry, always a pleasure.
Harry Brelsford
All right, well, first of all, you’re one of our speakers at the CannaTech Expo June 22 through 24 in Fort Lauderdale. So thank you very much for helping us out and get that show launched.
Jim Roddy
Well, thanks for having me. I’m definitely looking forward to it. And we’re actually just recording a podcast yesterday not talking about cannabis. But talking about how the managed services world and the retail it world used to be totally separate. Like they were almost astanged. And now we’re starting to see overlap in terms of, you know, folks in the retail it space, the point of sale space, adapting managed services, best practices, so looking forward to see those worlds colliding from a cannabis standpoint in June.
Harry Brelsford
Yeah, absolutely. Well, in the March meeting, the cannabis community over the RSPA, the the talk was dominated by payments. So I’m going to hand it over to you what was the nature of the conversation? Sure. So
Jim Roddy
I guess just so folks understand the way that a lot of bars in the retail or restaurant space, the way that they make a lot of money and where the recurring revenue comes from, is they’re responsible for the point of sale system, which integrates the payments, and they get a portion of every swipe that goes through. And so then when they look at a new market, they’re saying that I want to be able to control the payments. Well, obviously, that isn’t the case, you know, from a cannabis standpoint right now. And so that’s where the conversation always starts. How do we get credit card swipes? And then if I can’t, what are the other alternatives? And so that’s a lot of what we talked about in terms of what are the alternatives, whether it’s, from a crypto standpoint, some sort of debit solution, and that a big conversation was about cashless ATMs. And we talked about that at the March meeting. And also, at our inspire conference where we have some resellers who were doing that, that they are setting up an entire cashless ATM system. But VSA starting to crack down on that and saying, basically, to some degree, you can’t do that. And so that is something that a lot of folks need to look out for you and I are not attorneys. But that’s something I think folks need to be mindful of in terms of there is this alternative payments opportunity? It’s a great way to get into a dispensary. And if you’re handling the payments, when credit cards, you know, when things become federally illegal, you can’t use credit cards.
And so you can look from these alternative payments standpoint, and the cashless ATMs. And then you just kind of figure out, how far am I able to go with this. But if you are able to do it, it’s certainly something that is of interest in terms of how do you start handling the payments? In in this space?
Harry Brelsford
Exactly. Well, final question for you this time. What is a cashless ATM?
Jim Roddy
Sure. And so you think about again, I’m not the person who’s turning the screwdriver. But it’s essentially where you right now you go to an ATM, right? You enter your card, you know, this is and you get the money out. Right, this would be a way in terms of you put your card in instead of the cash coming out to you. It ends up paying for your transaction in that space. So the ATM, it functions as an ATM, but instead of spitting out the money now think about it from a maintenance standpoint, if it’s all digital, it’s way easier for somebody to maintain where you can just keep going on and on and on with that because it’s all electronic payments. So that’s the downside of trying to manage an ATM or if you’re inside a dispensary having an ATM, you know, somebody’s got to refill and you can run out of cash. If it’s all digital, and it’s just rerouted somewhere else. You can go that way. So again, I like we’ve linked in the last notes from the cannabis community. Just search it’s a headline visa crackdown on cashless ATMs at cannabis dispensaries through MarketWatch. You want to go in and read about that. But what folks are saying is, you know, somebody asked, Are these things being cracked down on? And the answer is, to some degree Yes, it’s not every single cashless ATM, you know, visa is going after but they’re going after some of them anecdotally as what we’re hearing. And so it’s something you really have to have to watch out for. So folks cannot wait for the safe Banking Act to pass. They cannot wait for these things to become federally illegal. And then people don’t have to jump through all these hoops. And you’ll say, you know three years from now what’s a cashless ATM, people won’t even need to pay attention anymore, right because it’ll be a thing of the past but it’s something that folks should, should definitely look into. Whether you’re in an array they’re considering to be in it. You gotta you know, make sure you measure twice and cut once
Harry Brelsford
Alright, All right there we go Jim okay thanks a lot we’ll talk to you next time
Jim Roddy
thanks Harry Always a pleasure
