Cannabis payment

14 min read

Cannabis Payments Options

December 14, 2021


A cannabis dispensary is becoming more popular in the United States. Many business owners are applying for licenses, and those already in operation are expanding at an alarming rate. The industry is already worth billions of dollars, and as more states are expected to legalize marijuana, the industry can only grow even more. However, cannabis remains illegal at the federal level. The federal law classified marijuana and its products as a schedule I substance. This makes it as highly prohibited as substances like cocaine and heroin. The federal government believes it has little or no benefit and can cause lots of harm. This classification and prohibition have many effects on the industry. Among those is the payment option.

Because the federal authority has not legalized cannabis, all standard credit card and debit card operators do not allow their cards for transactions with marijuana dispensaries and other businesses dealing with marijuana products. This has greatly limited the payment options available in the industry. However, there are still other ways to process payment if you are a cannabis dispensary owner. What are these options? How do you decide which banking options are the best for you and what are the implications of accepting unauthorized payment methods? We will discuss all these and more.

Cannabis Dispensary Payment Options

Despite the refusal of credit and debit cards for payment at cannabis dispensaries, there are still many options available for payment in the industry. Below are the most popular payment options in cannabis dispensaries:

Cash: The most common and most straightforward payment option in a cannabis dispensary is cash. However, payment with cash has many disadvantages. If you are operating on a big scale, then handling a lot of cash may be burdensome. You will have to count each payment manually, and this may take significant time. You can also make errors while counting or giving changes. Also, having lots of cash in your dispensary poses a theft risk. Not only will your money be at risk, but also the lives of your workers. Balancing accounts after each day’s sales is another challenge. Again, this may have to be manually done. The manager may also need to manually count all money received for the day to check for accuracy.

Another challenge with cash payment is that it will be impossible to pay in advance for ordered online products. If you run delivery, you will have to collect payment at the point of delivery. Having cash in your delivery van till the end of the day is also a security threat to your drivers. At the end of the day, you will have to face the challenges of depositing the cash into your bank account. In most cases, you will also have to pay charges for cash deposits.


Cryptocurrency: Another option you have for receiving payment at your cannabis dispensary is through cryptocurrency. Cryptocurrency has many advantages. It can be used to make an advanced payment. Therefore, if you run delivery, your drivers do not need to collect cash at the point of delivery as your clients would have paid during their online orders. It is also a safe means of payment and protects your store and your delivery drivers from theft. With crypto payment, you can avoid bank charges. However, while crypto enables payment without restriction or much regulation, digital currency is not stable. That means you will have to be dealing with the regular fluctuation in the price every now and then. Besides, not many customers are used to cryptocurrency despite its increasing popularity. Hence, it is not likely that cryptocurrency can solve your payment problem. It can only complement your major payment option.

ACH Transfer: Automated Clearing House or ACH allows your clients to transfer funds to your bank account. It is fast and cashless service. This eliminates the burden of counting cash or human errors while counting or giving change. It also eliminates the risk of thieves invading your business place. However, this payment option requires registration with a third-party platform to facilitate the transfer. Your customers will also have to download the application of the third party before they can process the payment. To make the transfer more manageable, you can integrate your POS so that your customers will only need to input their pin to checkout. As effective as this option is, it is not as popular and straightforward as cash or bank cards.

Point of Banking: Point of banking is similar to getting cash from the ATM. You will have to insert your bank card into a card reader and enter your pin. However, instead of getting cash, you will only get a receipt that the cash has been transferred from your bank account to a chosen bank account. Suppose you want to pay a cannabis dispensary with a point of banking solution. In that case, all you have to do is transfer the money from your bank account to the dispensary account and show them the receipt, which serves as the evidence of payment. Transfer can only be done in specific units of cash. However, you can get a change from the dispensary once you show them the receipt. Point of banking eliminates the risk of keeping cash in your facility. However, it does not allow prepayment or eliminates manual calculation of daily sales. Also, it doesn’t eliminate human error as the budtender may be the one to input the cost of the commodity on the ATM. The point of banking is still new, and many customers may not be used to it. However, it is easy to understand.

Why Not Debit/ Credit Card?

Debit and credit cards are among the most popular payment options in many business places. They make transactions fast and straightforward. They also eliminate human error, the risk of keeping cash, and the stress of going to the bank to deposit cash. There are also little charges associated with this mode of payment when compared with a cash deposit. Customers can pay for their orders online with a credit or debit card. All payments will be easily calculated and sorted if your POS is integrated.

Payment option

Unfortunately, cannabis dispensary credit card processing is not possible yet. You may ask why? This is simply because of the legal status of cannabis according to federal law. Therefore, many credit and debit card providers will not allow their cards to be used as a payment solution in a cannabis dispensary. The federal law has classified marijuana and its products as schedule I drug and make it an illegal substance to possess. Even though many states have legalized medical cannabis and several states have also legalized cannabis for recreational use, the federal law does not change. Hence, the position of the bank card providers does not change. Perhaps, not until the federal government legalizes the use of cannabis, at least for medicinal purposes, credit and debit cards may not allow transactions with cannabis dispensaries.

What Happens if I Accept Debit and Credit Cards?

Suppose you are a medical marijuana dispensary, or you sell cannabis for adult use, and you choose to accept payment with debit or credit cards. In that case, it will be seen as non-compliance with the regulation in the industry. First, your merchant will not be listed by the credit card processors. This may not stop you from accepting the cards and hence increase your sales. But the aftermath may be more than the gain. What are the risks you are taking?

Credit and debit card processing companies have ways of monitoring transactions on their system. They will certainly discover your business after a short time of regularly accepting payment through their services. Once they find out about credit card processing, they will alert you. This is usually done through phone calls or e-mail. Not only will they warn you of going against their terms and conditions, but they will also temporarily stop your services. They may go to the extent of freezing your account and refuse to release all payments to your account that have not been processed yet. They may also blacklist your account. Blacklisting your account and business means that even in the future, if the cannabis industry is allowed to accept payments through debit and credit cards, your business may not be able to. The worst part is that the regulating authority may get involved.

Suppose the government gets involved in your case with the card processing company. They will enquire why you failed to comply with the regulation. If you are found to be non-compliant, your license may be suspended or withdrawn. That may be terrible for your business. Even if your license is not withdrawn, you may have to endure several days (if not weeks) of a business closure. This may mean a lot of loss of revenue for the business in the worst-case scenario. Your license will be withdrawn, and you will lose your business.

What is My Best Payment Option?

There is no one-size-fits-all option when considering payment at cannabis dispensaries. Each dispensary owner should consider the best option for them and their customers. This should depend on the location of the dispensary and its scale. The nature and preferences of the customers should also be considered as well as the security of the dispensary. It would be best if a cannabis dispensary could make all the payment options discussed earlier available to its customers.

Factors to Consider Before Choosing a Payment Solution

After carefully selecting your payment plan, you may need a solution to integrate the plan into your cannabis processing payment system. Luckily, there are many payment solutions available today for a cannabis dispensary. However, there are many important factors to consider before choosing the best payment solution for your cannabis business. These factors include the following:

The reputation of the Solution Provider: It is essential to go with a provider with a good track record. Consider a company with good customer relations, a high level of technology, experienced staff, and solutions that work.

The Contract: Many solution providers will want you to sign a minimum of a three-year contract with them. This means that even if you are not satisfied with their services, you will have to endure it for at least three years or pay a high contract termination fee. However, many payment solution providers will not bind you into a long contract. Neither party will be able to terminate the contract at will without any consequences.

Charges: You must consider the costs of using the payment solution. While some solution providers will charge a flat rate, some will charge you per transaction. Consider anyone you think is the best for your kind of business and go for it.

Ease of Use: You must choose a payment solution that is easy to use both for you and your customers.

Cost of Hardware: You must also consider the cost of setting up the payment solution. While some companies will provide all hardware and include the cost in your fees, some will make you pay for the hardware. You must choose a payment solution that will not incur too much hardware cost, whatever the option.

Payment quality

Quality of Services: While you try to save money, do not ignore quality. In most cases, the popular and well-established payment solution providers usually offer quality services. However, there are some popular providers with inadequate services. Hence, study the quality of the services rendered by each service provider and choose one with high-quality services.

Safety and Security: The security of data is vital in payment processing. Make sure you only work with a company that can guarantee your customers’ information safety and security.

Future of Payment Options for Cannabis Dispensaries

There is no doubt the use of debit and credit cards will make payment, processing of payments, and record-keeping easier, faster, and more convenient at cannabis dispensaries. However, marijuana credit card processing will only happen if the federal law legalizes the use of cannabis, at least for medical purposes, if not for both medical and recreational reasons. While it is impossible to state with all assurance when that will happen, everyone knows it definitely will. There have been many debates in the house on the legality of marijuana and its products. Many pieces of evidence prove cannabis can help treat different medical conditions. Also, there is little or no evidence to prove that cannabis is indeed as dangerous as other Schedule I drugs like cocaine and heroin. However, legalizing products like cannabis will surely be time-consuming. Many protocols will have to be followed, and all stakeholders will be involved. Once this is done, credit and debit card processing companies will have nothing to hold against cannabis dispensaries. If the federal government legalizes the medical use of marijuana, then credit and debit cards will be included in the medical cannabis payment solutions.

Besides, the cannabis industry is growing fast, and everyone will be happy to do business with them. Hence we may soon witness credit and debit cards being legally accepted in marijuana dispensaries. This will increase the payment options available for a cannabis shop. There will be little need for point of banking payments as many clients will prefer to pay the dispensaries with their debit or credit cards. With that, the exact amount of product purchased can be paid for, and there will be no need for collecting change. There will also be little need for ACH transfer, especially as you will still need to download an application to process payment through this method.

However, payment through cryptocurrency will likely continue to become more popular. Many merchants will add a crypto payment to their payment options, and those already accepting it will continue to do so. The cannabis industry is not expected to be left out. Payment through cryptocurrency is likely to become a popular payment option at cannabis dispensaries, especially online purchases.

However, nothing can stop people from making purchases with cash. This is especially true for cannabis dispensaries located in rural areas. It will also be the major payment option for recreational cannabis, which quantity a customer can purchase at a time is strictly regulated. For purchases that involve a small amount of money, cash payment may be the most convenient option. However, the availability of debit and credit card payments will reduce cash payments at cannabis dispensaries. This will reduce the theft risk to the cannabis dispensaries.


Payment is an essential aspect of all businesses. However, cannabis dispensaries are limited by the available options. Because the federal government regards cannabis and its products as harmful drugs and makes it illegal to be possessed, debit and credit card processing companies do not allow their cards to be used for making payments in cannabis dispensaries. However, many other options are available for accepting payments in cannabis shops. These include cash, point of banking, cryptocurrency, and ACH transfer. Suppose a company ignores the regulation of avoiding debit and credit cards. In that case, it may be considered non-compliance while the regulatory authority tries to investigate the matter. If found guilty, the company may forfeit some of its money that has not been processed. In addition, its bank account may be blacklisted. In the worst case, it may have its license withdrawn.

Before choosing the best payment solution, a cannabis dispensary must consider the ease of use of the solutions available, the charges by the solution providers, and the safety the solution offers. It is also essential to consider the duration of the contract and the consequences of terminating the contract. Other factors include the cost of hardware, the quality of services rendered, and the kind of customer support services the company offers. The reputation of the company and the experience of its staff are also essential.

While debit and credit cards are being prohibited for use in cannabis dispensaries today, it is expected that sooner rather than later, the federal government will legalize the use of cannabis, at least for medical purposes. At that time, marijuana dispensaries will use credit and debit cards for payment legally. In addition, other payment options like cryptocurrency and cash payments are also expected to become more popular in making transactions at cannabis shops.