Since cannabis is illegal at the federal level, traditional credit card companies hesitate to get involved in the industry. As a result, a customer is ‘forced’ to pay only via cash or up to a limit through their debit and ATM cards which only a handful dispensaries accept.
Tired of the situation, many cannabis companies are looking to introduce alternative methods of payment. One such example would soon be seen in the dispensaries of Columbia Care, which is reportedly rolling out its own credit cards this month in Illinois.
Nicholas Vita, CEO of Columbia Care, said that they have been testing their cards in New York and are all set to launch them in Illinois through their dispensary in the Jefferson Park neighborhood.
The issuance of the cards will be lightning fast – all patrons will just be required to fill out a form in a tablet at the dispensary, and they would be able to use their credit card to buy products on the same visit, Vita said.
At the New York dispensaries, where the company tested its credit cards, customers purchased nearly 18% more per dispensary visit when paying with this alternative method. “This means that customers can buy larger quantities without having to come frequently – a perk for patients who can’t travel, and for customers traveling long distances to the dispensary,” Vita added.
Reportedly, the cards do not have fees, but the annual percentage rate for Illinois users will be 15.99. Notably, the average annual percentage rate is 17.73, as per CreditCards(.com).
For the credit cards, Columbia care is working with financial institutions and other intermediaries in each of the 12 states (plus Puerto Rico and Washington, D.C.) it is currently operating in.
Besides CC’s, other methods of processing cannabis sales do exist but they aren’t very popular and even contentious. For instance, a dispensary may let the customer buy a gift card with their traditional credit cards, which they can then use to purchase marijuana products.