We’ve blogged ad nauseam about the dire need for proper cannabis merchant accounts and banking, an issue that needs to be rectified. But it’s only one of a handful of big hurdles that retail cannabis merchants face when establishing a business in one of the legal states.
As our hub is located in Portsmouth, N.H., several Instabill staffers live just over the border in Massachusetts where two legal dispensaries recently opened, with more cities and towns also considering. In one nearby city, it’s causing a heated debate with city halls at capacity and city officials considering holding a special vote in the spring of 2019 (even though recreational cannabis was voted legal in the November 2016 local elections).
In the 10 states in which cannabis is legal, it’s not as if dispensaries immediately began popping up all over different communities with merchants making money hand over fist. We’re in the infancy stages of an industry that will have a significant ‘end-of-prohibition-like’ impact for generations to come. State legalization is just the beginning. There are constant challenges thereafter, ranging from enduring reputation concerns, finding appropriate payments and banking resources and community resistance – which our aforementioned Massachusetts city is currently experiencing.
An industry in flux
The MJBizCon 2018 tradeshow and conference in Las Vegas attracted 27,000 attendees – that’s a larger population than many towns and cities in the U.S. Every one of the 27,000 sees the dollar signs, the potential for a financial windfall, all trying to capitalize on some corner of the industry: cultivation, related products such as CBD and hemp, SEO for cannabis businesses, irrigation, even HVAC companies looking to break in.
We attended MJBizCon for the second straight year to find out more about the possibilities for robust payment solutions, to speak with like-minded folks with whom we could forge partnerships (at the moment, no one in the U.S. can process credit cards for cannabis transactions – which, to us, is the ideal payment processing scheme).
As we alluded prior, the cannabis industry is in its early stages and remains an industry loaded with imperfections – robust banking services and cannabis merchant accounts are at the top of the list for the near future (but hopefully improving in 2019).
It is just one of a handful of issues with which cannabis merchants will be faced.
Community resistance: Another hurdle
In every town or city considering opening a dispensary, there are going to be pockets of resistance. The most common are consumers’ fear of cannabis getting into the hands of minors – a legitimate concern. If our experience at a dispensary in Las Vegas is any indication for the remainder of the U.S., minors won’t be able to get anywhere near a dispensary with robust security measures in place.
Residents of any community should also understand that because legal cannabis is so new, dispensaries are going to be under the microscope for years to come by state and federal officials – more so than liquor stores. Dispensaries and their staffs simply cannot afford not to abide by state regulations for risk of being shut down.
Communities are resisting for reputational reasons, which is happening in Massachusetts and likely every city or town considering a dispensary, medical or recreational: Many residents simply don’t want their communities known for housing pot shops for fear it labels the community unfairly and draws undesirable elements. Massachusetts residents have even voiced concerns about the risk of property values plummeting (truthfully, we have no idea of the effect of dispensaries on property values).
How should cannabis merchants deal with resistance?
The panel in the MJBizCon seminar titled Compliance Issues for the Real World gave a frank and honest answer on working through resistance: Give back to the community. Give back to the local schools, soup kitchens, Salvation Army or local charities and movements. Giving back to communities is an excellent way to win over those who resist, and to prove value to a community.
One expert panelist advised all dispensary merchants to hire a compliance officer, whose sole job is to make certain the dispensary is operating under every conceivable state regulation and code.
Cannabis merchant accounts can be found here
If you’re a cannabis merchant in a recreationally or medically legal state, we’re curious to know what some of the challenges you’ve faced. Leave us a comment below.
For more information about our cannabis merchant accounts, visit our page to view our debit and crypto currency solutions, or simply speak with a live merchant account manager at 1-800-530-2444.