“This industry is considered essential by most of the states that we’re operating in,” F. Aaron Smith, executive director of the National Cannabis Industry Association, said in an interview with CNN Business. “If that’s the case, it only makes sense that we should also have access to the lending programs … and just to be treated fairly.”
“[Being cash-only] is a public safety hazard; it always has been,” Smith said. “This is an opportunity to, once and for all, fix that issue by passing the SAFE Banking Act.”
To achieve greater financial access is a tough ask, especially now, said cannabis investor Rob E. Hunt, of Linnea Holdings. He noted that the language in the recent $2 trillion stimulus package specifically excluded both plant-touching and ancillary cannabis businesses.
“Right message. Wrong time,” Hunt said. “This should be the catalyst to drive federal policy change, but saying it now is falling on deaf ears.”
Foundation for a digital future
How cannabis companies have adapted to Covid-19 essential business and physical distancing mandates provides a glimpse into the industry’s potential for a cashless, digital-dominated future. Some states have relaxed ordinances to allow cannabis companies to conduct online sales, deliver product and offer curbside pick-up service.
Businesses and consumers are quickly adapting to the “analog to digital” transition, said Socrates Rosenfeld, chief executive of Jane Technologies, which developed an e-commerce platform for cannabis retailers.
“Through times of great environmental disruption, businesses and industries get disrupted as well,” he said. “This is what we’re seeing take place across global retail.”
In March, Jane Technologies brought on more than 120 new dispensary clients. It took three years for the company to amass 1,300-plus dispensaries, he said.
In recent weeks, delivery purchases have gained an increasing share of overall purchases at stores offering both a delivery and pick-up option, Jane Technologies data show. During the week of March 11, delivery accounted for 50% of transactions at those stores, up from 41% a month earlier.
Ganja Goddess, a California cannabis delivery company, saw a steady uptick in business following the issuance of stay-at-home orders.
“Something like this could be the push that puts the market a lot closer to where the rest of the retail economy is,” said Zachary Pitts, chief executive officer of Ganja Goddess.
Harborside, one of the longest operating cannabis dispensaries in California, has hired more delivery drivers and leased additional vehicles to respond to the upswing in demand, said co-founder Steve DeAngelo, who remains an adviser to the company.
More customers opting for online orders or delivery — or, in places like Nevada, that now being the only option — will bolster the need for more cash-free payment options, said Tyler Beuerlein, chief revenue officer of Hypur.
Hypur is a fintech company that uses automated clearinghouse transactions to allow for cashless payments in industries such as cannabis. Last week, Hypur announced it would facilitate payments for cannabis company Caliva’s delivery and curbside pick-up.
“People, now more than ever, want a contactless, predictable, sustainable means of payment,” Beuerlein said.