In an increasingly cashless world, the cannabis industry faces a significant challenge: being a cash-only business. With marijuana legalization in 21 states and decriminalization in several others, businesses struggle to keep up with modern payment methods. The solution? Smoakland is beta-testing a crypto loophole for credit card payments, revolutionizing the way customers purchase cannabis.
Crypto: The Key to Seamless Transactions
The key to Smoakland’s workaround lies in cryptocurrency. When customers purchase cannabis, they’re actually buying crypto, which is then immediately used to buy cannabis and cashed out. This method keeps the transaction under the radar of payment processors and credit card companies, who only see a cryptocurrency purchase.
A High-Risk Market with Willing Customers
Smoakland’s Managing Director of Marketing, Jeff Dillon, acknowledges that cannabis is a high-risk market, which results in higher processing costs. However, he believes customers are willing to pay these fees for the convenience of using a credit card. With a 5% processing fee for high-risk transactions, Dillon compares it to e-commerce standard fees of 2-3%.
Protecting Trade Secrets
The Smoakland team is keeping the identity of their payment processor a secret as they navigate this uncharted territory. They’re closely watching fluctuations in average order size throughout the month, hoping that offering credit card payments will stabilize their sales and cater to customers in need.
The 4/20 Full-Scale Launch
Smoakland plans to launch its credit card service on April 20th, a date synonymous with marijuana culture. Dillon notes that the timing is strategic, as customers may have tighter budgets between pay periods. Offering credit card payments could be the solution for those who need it.
More Than Just a Recreational Product
While aware of the recreational nature of their products, the Smoakland team views their cannabis as an “essential, critical medicine for people.” They’re pushing for competitive pricing, offering a $49 ounce as an affordable option for consumers.
Navigating the Future of Cannabis Payments
As Smoakland prepares to launch its payment processor, the company remains optimistic about the future. They believe that the SAFE Banking Act is tilting the scales in their favor, potentially paving the way for a more accessible and convenient cannabis industry.
How do you think Smoakland’s crypto loophole will impact the cannabis industry? Share your thoughts in the comments below!
