Most consumer cannabis transactions are done in cash, legal or not. Since the United States classifies cannabis as a Title IV drug, the banking industry is unwilling and unable to provide services to cannabis operations. That leaves dispensaries managing and protecting massive sums of cash, and the stores cannot offer a modern retail payment system to the consumer.
SuperNet has a solution. The company will issue and process credit cards that will work in dispensaries. The service is expected to launch in January 2022, and accepted at 100 California retail locations.
“It’s a real credit card they’ll get from us,” CEO Michael W.K. Tsang told TechCrunch. “It’s just like any other credit card in your wallet, except instead of a VISA or MasterCard logo, it’s a SuperNet logo. You can spend it anywhere Supernet is accepted.”
The upsides are apparent. Consumers can leave the cash in the ATM and pay using a plastic card or NFC app. Retailers can reduce the amount of money on-site, and collect more data about their customers who are no longer cash transactions. There’s even a loyalty program.
Consider cannabis regulations, and SuperNet’s platform gets more compelling: This platform was built for the complex world of cannabis. CEO Tsang explained.
“Regulators want to see fewer cash deposits, and they want to see electronic payments,” Tsang said. “The beauty of what we’re offering is that our money — the electronic money — is tracked from the point of purchase. It’s traceable. We know where the money comes from. In cannabis, with cash, you have to spend a lot more effort to trace where the cash came from.”
The amount of cash used in legal cannabis transactions is staggering, and money laundering is always a concern by regulators. Cash management is often regarded as one of the most expensive parts of operating cannabis businesses. There are countless examples of dispensaries hiring paramilitary security, storing bundles of cash in plastic totes, and hiring staff only to count the stacks of bills.
