What Is Cannabis Banking?
The cannabis industry is vast, with many business opportunities. Whether you’re a cannabis dispensary or a vendor that specializes in THD/CBD products, you need to find a reliable cannabis banking and payment solutions partner.
There are still some grey areas between state law and federal laws for cannabis, which is why many banks do not serve the needs of cannabis banking and financial solutions.
When Colorado legalized recreational marijuana in 2014, cannabis businesses couldn’t access banking services or financial institutions they could count on. When a traditional bank would provide their financial services, the fees were astronomical.
In 2018, Congress legalized hemp which led cannabis banking solutions to become a bigger topic. However, hemp-related businesses continued to struggle with banking. So, legalization does not automatically equate to widespread, inexpensive banking services.
Fast forward to 2022. Bank regulators began allowing banks and credit unions with solid compliance policies to serve the cannabis industry. The issue of access began to subside slightly — but not affordability.
The SAFE Banking Act was born as a proposed solution. In 2022, this act is the best opportunity to help ensure cannabis businesses are treated the same as other legitimate, legal businesses. However, the chances that this act will be successful remain unclear.
The economic value of the cannabis industry is immense, but only time will tell.
So, what do you do in the meantime?
There are alternative cannabis banking services, which we cover in greater detail below.
Who Is Cannabis Banking for and How Does It Work?
You know that the banking process isn’t straightforward if you sell cannabis-related products. Without a bank, your business can’t set up deposit accounts, write checks, run payroll, accept cards, and the list goes on. Even if you have a bank account, you can’t accept debit card or credit card transactions from companies like Visa. This barrier means your customers are limited to the amount of cash they have on them, which can significantly reduce your average daily sales.
Although most big banks avoid cannabis companies, as do credit card networks, there are now several cannabis banking alternatives that allow you to confidently conduct business without having to worry about insanely high monthly fees.
One of the most legitimate and cost-effective options is implementing direct connections to financial systems — also known as Web3. The process allows customer to share their card details through a secure connection using their own device. However, no cash is produced. The amount gets deposited into a dispensary’s account.
This option operates on the pin debit network and is legal in all 37 states that have legalized medical cannabis.
Features to Look for in a Cannabis Banking Partner
- No hidden fees — There are alternative cannabis banking services that continue to charge hidden fees. That is why you need to partner with a payment processor with a transparent pricing structure.
- No contract — If you don’t want to be bound to a contract for 1-4 years, you don’t need to be when choosing the right partner.
- Excellent customer service — You can access a partner that offers live personalized service. So, why settle for anything less?
- Security — Seek a partner that is reputable and secure.
Learn more about what cannabis payment processing can be when you choose the best partner.
Why ThirdPhase?
ThirdPhase ticks all of the boxes above, providing a compatible Web3 payment system that makes it easy for customers to pay for the products you offer. As a dispensary or vendor, ThirdPhase is free to use. With no monthly payments, you can continue to support your bottom line and overall growth. There is also a feature that allows customers to tip your staff for providing amazing customer service.
In summary, ThirdPhase offers:
- Free access to a Web3 decentralized financial system. Set up and staff training are also free.
- No term contract. Try ThirdPhase without worrying about being locked in for years.
- No hidden fees. Gain peace of mind knowing you won’t be charged service fees.
- Around-the-clock customer service to ensure the highest customer satisfaction.
- Security and experience. Having 25 years of debit card processing experience, ThirdPhase is reliable and secure. We currently process over $30 million each month across 200+ nationwide dispensary partners.
Contact ThirdPhase Processors to learn more, or sign up to get started today!
