• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
logo
  • Processing Solutions
    • POS
    • In-Store
    • Mobile
    • Online
    • All Payment Services
  • Business Solutions
    • Grocery
    • Restaurants
      • Full Service Restaurants
      • Quick Serve Restaurants
      • Food Trucks
    • Retail
      • Smoke Shops
    • Salons & Spas
      • Health & Wellness
    • Automotive
    • Professional Services
  • More Tools
    • Capital
    • Business Credit Card
    • Payroll
    • Marketing
    • Loyalty
    • Inventory
    • Team Management
    • Gift cards
    • Cash discounts
    • Dashboard
    • Websites
    • Scan Data – Velocity ProPak
    • QR Codes
    • All Tools
  • Resources
    • FAQs
    • App Marketplace
    • Client Support
    • EBT Update
    • YouTube Videos
  • Blog
  • About Us
    • About Us
    • Affiliate Program
    • Careers
    • Update my TIN
    • Order Supplies
Client Login Contact Us Free Custom Quote

Cannabis Credit Card Processing for Dispensaries & CBD Businesses

August 5, 2020

cannabis credit card processing | cannabis pos system | Velocity Merchant Services

Cannabis and CBD dispensaries are doing amazing business in the US. They’re legal in 33 states for medical marijuana and 11 states for recreational marijuana. In the United States in 2019, the marijuana market was worth more than $52 billion, and it’s expected to triple by 2025. But the problem is that marijuana is still illegal on a federal level. Therefore, a nightmare when it comes to finding cannabis credit card processing and merchant banking solutions to sell the products, both online and in person. In many places, banks that accept funds from a marijuana dispensary–even a legal one–can be considered money laundering. 

This results in all kinds of troublesome practices, such as needing cannabis dispensaries to be all-cash businesses. This makes them a prime target for robberies, because of the large amounts of cash on hand. What should just be a simple transaction requires the use of paper money, armed guards, and armored trucks. 

But there are some merchant services that are willing to work with cannabis retailers and have taken the steps to navigate the minefield that is cannabis credit card processing. 

Cannabis Payment Processing Services and the Cannabis Industry

In states with the most permissive laws regarding cannabis sales, such as Colorado, cannabis credit card processing is doing great business. CBD oil businesses, are easier to manage with federal law as well. 

In many states, there are specific regulations that affect who exactly can buy cannabis products, and these can include registration identification cards for anyone who grows, transports, handles, or consumes the cannabis product. In these cases, it’s easier for merchant systems to work with the cannabis dispensaries, as they use the same medical processes that medical facilities use, connecting them with Medical Marijuana Verification Systems (MMV) to let sellers verify these cards. 

Payment processing solutions such as virtual terminals are also a growing area of interest in the cannabis community. A virtual terminal doesn’t accept physical cards but rather uses the information from the card to process payments. This makes online processes seamless, and makes a good workaround for in-store purchases. The dispensary can use the card and compare it to the MMV system to run verification when processing payments.

This also makes it easy to take orders over the phone as well as online.

Other benefits of virtual terminals and online payment processing include the cost efficiency, because the dispensary doesn’t have to pay for any physical equipment. It’s also easy to set up for both over-the-phone and in-store purchases. You can accommodate many types of customers, including recreational, medical, and CBD users, and ultimately it’s the most efficient system.

Marijuana and the Traditional Banking Services

Without the virtual terminals, credit card banking services for marijuana usage have blacklisted the industry. It’s nearly impossible to find a vendor that allows marijuana purchases from major credit cards. It’s not that no bank will help you, you just have to search high and low. Banks are bound by federal laws, and federal law is still against legalization of marijuana. They don’t want to risk the ire of the federal government. 

According to the Treasury’s Federal Crimes Enforcement Network, more than 630 financial institutions were doing business with cannabis purveyors by the end of 2018. (Unfortunately, we only know about this because complaints were filed against all 630 of those banks.)

Be careful of these institutions, as some of them flat-out lie about their ability to off cannabis credit card processing. Often they are only registered to provide service for smoke shops. 

Another option is using a non-FDIC insured institution as your bank. But being FDIC insured is a pretty big deal. It guarantees that if the institution collapses you’ll be insured for up to $250,000. Currently there are no FDIC-insured institutions that process any payments for the marijuana industry. Not as long as it’s still illegal on the federal level.

Cannabis Credit Card Processing: The Future

With the speed at which marijuana sales are growing, and the increasing deregulation of marijuana, it’s easy to see how new cannabis credit card processing solutions are going to become commonplace in a very short time, probably within the next four to five years. Given the overall shift in public opinion–a recent poll from the Pew Research center said that 91% of Americans believe that cannabis should be legalized in at least some forms, while only 6% said it should be banned across the board. And this change is relatively recent and growing like wildfire. In 2010, 54% of Americans felt that marijuana should be banned in most cases, whereas only a decade later that number has dropped to less than thirty percent.

To learn more about cannabis credit card processing and merchant services, explore VMS Cannabis Credit Card Processing Solutions Today!

Categories: Credit Card Processing, POS Tags: cannabis, cbd

Primary Sidebar

Payment Solutions

  • Terminals / In-person
  • POS
  • Websites

Business Solutions

  • Grocery
  • Restaurants
  • Full Service Restaurants
  • Quick Serve Restaurants
  • Salons & Spas
  • Retail
  • Health & Wellness
  • Professional Services

More Tools

  • Capital
  • Cash discounts
  • Payroll
  • Marketing
  • Loyalty
  • Inventory
  • Team Management
  • Gift cards

Resources

  • FAQs
  • EBT Update
  • Client Support
  • YouTube Videos

About Us

  • About Us
  • Affiliate Program
  • Join Our Team

Velocity Merchant Services

3051 Oak Grove Rd. 2nd Floor
Downers Grove, IL 60515
Phone: 888-902-6227
Fax: 888-902-6229
info@getvms.com

Velocity Merchant Services (VMS) is a registered ISO of Deutsche Bank Trust Company Americas. The Clover® trademark and logo are owned by Clover® Network, Inc., a First Data company. EMV® is a registered trademark in the U.S. and in other countries, owned by EMVCo, LLC. Apple Pay®, Apple, the Apple logo, and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. All other trademarks, service marks and trade names referenced in this material are the property of their respective owners.

Copyright © 2023, All rights reserved, Velocity Merchant Services Privacy Policy|Terms of Use

This website uses cookies to improve your experience. Accept Reject
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT
Disclaimer

By providing your contact information, you consent to receiving calls and/or text (“SMS”) messages from us including those made by use of an automatic telephone dialing system (“ATDS”) about our relevant content, products and services. Standard messaging & data rates apply.

Clover Station 2.0 Point-of-Sale

This all-in-one POS solution includes everything you need to streamline your business. 

More counter room thanks to a space-saving design: The 14-inch, HD display and screen swivel feature keep customer engagement clean and simple.

Faster apps and business: Let the 8-core, state-of-the-art Qualcomm® Snapdragon™ processor and 4GB memory handle the toughest tasks.

Modern payment technology: Accept mag stripe cards, EMV chips, contactless payments and more.

A versatile app market: Use Clover’s robust apps to give your business endless possibilities.