As Maryland’s first medical marijuana dispensaries began opening this month, some are turning to a cashless payment system they hope will make transactions safer and more convenient.
CanPay, a mobile app designed to allow debit payments in the cash-heavy cannabis industry, has expanded into Maryland. It will be offered initially at about half of 10 state-licensed dispensaries, all of which have opened or are set to open within the next few months.
CanPay launched in November 2016 in Littleton, Colo., and now offers its service in nearly 100 dispensaries in eight states that have legalized medical marijuana. The company hopes eventually to expand to all dispensaries in Maryland.
The state’s first dispensaries began opening this month, four years after the General Assembly passed a law legalizing marijuana for medical use. The state has issued licenses so far to more than 20 dispensaries. Five have opened, though most have limited supplies. The state estimates it will eventually have 102 dispensaries.
More than 17,000 consumers in the state have registered for medical marijuana, data from the state’s Medical Marijuana Commission shows.
The industry has operated on a mostly cash basis because of the conflict between state and federal marijuana laws. Under federal banking and financial rules, credit and debit cards can’t be used for medical marijuana purchases. Federal guidelines issued in 2014, however, allow financial institutions to take steps to qualify to offer services in states that have legalized medical use. It is believed that only a small fraction are serving the industry.
CanPay has 20 financial institutions in its network in eight markets.
Dustin Eide, CEO of CanPay, says the service has expanded as it has been able to partner with banks that comply with the 2014 guidelines. The service is free for consumers, while dispensaries pay 2 percent of transactions. Eide believes the company’s service eventually will become the standard in most dispensaries as both patients and dispensaries seek safer, more convenient alternatives to cash.
“There’s a reason people don’t generally carry a lot of cash on them,” Eide said. “It’s important for the industry to have a more normalized and cashless payment method.”
The payment system works through a website and mobile app that customers download. When a customer uses the app to make a purchase, using a single-use payment personal identification number, funds are transferred to the dispensary form a checking account.
Greenhouse Wellness, which is waiting to have an adequate supply of products from growers before opening, will be offering CanPay as a payment option. The business considered more than 40 vendors before selecting CanPay, said Kait LeDonne, chief marketing officer..
“We find many of our patients want a cash-free option,” LeDonne said. “It’s something they use in other purchases, and we want to offer them the same convenience in the dispensary.
Dec. 14: This number of dispensaries approved by the state has been updated.
This article was originally published on Dec. 13.