How Cannabis Payments and Banking Would Profoundly Impact Other Industries

How Cannabis Payments and Banking Would Profoundly Impact Other Industries

We often think of the difference robust cannabis payments and banking solutions would make. Sooner or later, that day is coming.

Back in the 1980s, we distinctly recall a music video by John (Cougar) Mellencamp titled ‘Rain On the Scarecrow,’ which opens with three farmers discussing the fractured state of farming in the U.S. at the time, how farmers were barely making a living and felt slighted by politicians. The very first line of the song is telling:

Scarecrow on a wooden cross, blackbird in the barn. Four hundred empty acres that used to be my farm…

‘Rain On the Scarecrow’ was released in 1985, a time when U.S. farmers were struggling to make ends meet and could’ve used more help from the federal government. No U.S. farmers get wealthy at their occupation, but legal marijuana and hemp would certainly change things for the better.

Farming is just one of several industries that would be profoundly impacted by cannabis legalization. It’s not 1985 anymore, but more than ever, the federal government is under pressure to do what it takes to improve cannabis payments, whether to:

  • Permit banks and the card brands to seamlessly process marijuana payments without penalty (the STATES Act will help).
  • Re-schedule or remove cannabis from the list of Schedule I substances, alleviating any fear banks and the card brands have about violating federal law.
  • Create a government-run federal credit union to handle all cannabis banking transactions in the U.S. (four years ago, this was what we thought would happen).

As an increasing number of cannabis merchants are pushing for robust payment processing and banking services, what often goes overlooked is the positive impact legal cannabis will have on other industries.

MJBizCon 2018 a precursor and an education

We attended MJBizCon 2018 to make in-roads with like-minded payments companies when it came to cannabis payments. At the same time, we were astounded by the enormity of the opportunities created by cannabis legalization when we visited the massive exposition hall. There were perhaps a dozen industry types ranging from lighting and HVAC companies to organic pesticides and CBD extraction businesses — all businesses that can benefit from the legalization of cannabis.


Shortly after Canada made recreational marijuana legal on Oct. 17, it encountered a problem: There is already a shortage of product and a colossal demand. Canadian farmers and growers are poised to become the epicenter of the cannabis industry, and not just those who farm outdoors. To get by Canada’s bitter cold months, indoor grow facilities will begin to spring up throughout the country to help meet the demand.


CBD is the non-psychoactive component of the cannabis plant with many health benefits, and the industry is presently surging in the U.S., despite the fact that only 33 of the 50 states have made cannabis legal for medicinal and recreational purposes. It leaves one to imagine the possibilities if cannabis was federally legal. The CBD industry is not just bolstered by physicians and health professionals prescribing it for ailments (such as pain, anxiety and PTSD, epilepsy and Crohn’s disease), but also from laboratories that extract the oil from the cannabis plant.


Recently we blogged about the Farm Bill, and the potential impact it could have on the hemp industry – an economic stimulus in and of itself (it recently passed through Congress overwhelmingly). Hemp is a rather low-maintenance crop useful in products such as lotions, clothing, fibers and plastics. It requires little water and no pesticide additives, and also removes toxins from soil.


Think of all the components required to grow crops, and every single one of them are primed to receive a boost from cannabis legalization. Proper irrigation is one of them, for both indoor grow facilities and traditional farms.

Heating, ventilation and air conditioning

Room temperature, proper ventilation and air quality are critical components for indoor grow facilities. In four-season regions such as Canada, New England and the Pacific Northwest, indoor grow facilities will begin sprouting, if not already, to enable merchants and growers to grow year-round.


As more growth warehouses are being erected throughout North America, proper LED lighting is required. Throughout the cold and dark winter months, growers turn their attention indoors to grow product.


For better or worse, when Colorado and Washington became the first two states to legalize the sale of recreational marijuana in 2012, different facets of the security industry – particularly guards and armored trucks – were suddenly in very high demand for good reason: Dispensaries in both states were conducting all transactions in straight cash, thus making multiple, high volume deposits of cash daily while storing mass amounts of cash in-house, for fear of making a deposit of more than $9,999 (it is illegal to transport more than $10,000 cash). Dispensaries and employees were targets for theft and still are.

Some dispensaries, such as the chain MedMen, have created their own banks to enable for debit transactions, but many storefronts can only transact cannabis payments in straight cash with the help of in-house ATMs.

Saving the best for last: Banking

We receive a handful of inquiries daily regarding merchant accounts for CBD and hemp. It often leaves us wondering what the demand would be like if cannabis was federally legal. In addition to farming, we believe the banking industry would be the one most profoundly impacted by federal legalization. And it’s not just banks that would reap the benefits of cannabis payments; it is every entity along the payment journey:

  • Credit card brands and issuers
  • Merchant account and payment service providers
  • Agents & ISOs
  • IT engineers who build and upgrade payment gateways
  • Food delivery services

In truth, that last bullet point is with a grain of salt, but our point is clear: federally legalizing cannabis would be an economic stimulus in itself.

Need cannabis payments solutions?

Instabill recently came upon a solution for cannabis payments for licensed storefronts that operates like a debit card. Consumers are issued a debit card which they connect to their bank account to enable for debit transactions. Similar to a mobile wallet, money is easily transferred from bank account to card, making for seamless payments at the point of sale.

Cannabis merchants, meanwhile, receive payouts every 24 hours.

To discover more about our solutions for cannabis payments, speak with a live merchant account manager at 1-800-530-2444.

We prefer to begin our merchant partnerships with a frank conversation.

Call Today
Quick Approvals
Contact Us Now at +1 (800) 530-2444

Apply Now

Leave a Reply

Your email address will not be published. Required fields are marked *