Dispensaries in America – Overcoming Payment Issues for America’s Hottest Industry - GoldStar ATM

The State of Marijuana

Image of marijuana dispensaryCurrently, marijuana is legal for recreational use in eleven states and the District of Columbia. Additionally, thirty-three states, plus the District of Columbia, have legalized medical marijuana. With over half of the United States having some form of legalized marijuana, one might expect that there would be some universal form of banking for marijuana dispensaries. However, that is not the case.


Bud is Big Business

Since marijuana is still illegal on a federal level, marijuana dispensaries face large issues with payment systems and banking needs. This happens even though legal marijuana is a big business in the U.S. In 2019, sales of recreational marijuana are projected to reach $12.4 billion dollars.[i] That’s from only 11 states and Washington D.C. For medical marijuana, U.S. sales are projected to reach between $4.2 and $5.2 billion dollars[ii], making legal marijuana a roughly $20 billion-dollar annual industry in this country.

Image of marijuana flower.Additionally, the marijuana industry also earns state and local governments a hefty income in taxes. In 2020, the sales of medical and recreational marijuana are projected to raise approximately $2.2 billion in taxes, which is a significant increase from the 2017 amount of approximately $750 million in earned taxes[iii].

And the sale of marijuana as a business is on the rise. In 2017, before several states legalized recreational use of marijuana, there were between 20,000 and 28,000 cannabis businesses in the U.S.[iv]

When Cash is King

Marijuana leaf and money

One overarching question in the industry is given that marijuana is still illegal on a federal level and yet legalized at the state level to the tune of $20 billion dollars annually, how are dispensaries handling sales payments? The answer is cash.

Banks won’t take on dispensary customers in case they violate federal laws governing money laundering. To date, the only accepted form of payment at a marijuana dispensary is cash.

In a Chicago news article from March 2019, Illinois state Treasurer Michael Frerichs was quoted as saying, “The inability of the legal cannabis industry in Illinois to use a bank or credit union for basic services such as check-writing, savings or access to capital is a sleeping giant. We have an industry hiding in the shadows because banking rules built decades ago have not kept up with changes in behavior and in law,” state Treasurer Michael Frerichs said.

Meeting the Needs of Customers

Image of marijuana dispensaryAs cash readily flows in and out of dispensaries, cannabis shop owners are seeking better and easier ways to make cash available to their customers. One way dispensary owners can do this is through dispensary ATMs. Having an on-site ATM allows customers to withdraw cash for purchases, increasing the likelihood that they will spend in-store. By placing a dispensary ATM within their store, owners increase loyalty and foot traffic to their shop.

Until marijuana is legalized on a federal level, or the U.S. government comes to some sort of agreement with states on dispensary banking rules and allowances, dispensaries in the United States will require cash payments. Providing easy-access cash resources for customers is a proactive way to increase sales in a rapidly-growing market.

[i] New Frontier Data. (August 1, 2018). Sales of legal cannabis in the United States from 2016 to 2025 (in billion U.S. dollars) [Graph]. In Statista. Retrieved November 01, 2019

[ii] Marijuana Business Daily. (May 9, 2019). Medical marijuana retail sales for the U.S. from 2018 to 2023 (in billion U.S. dollars) [Graph]. In Statista. Retrieved November 01, 2019

[iii] New Frontier Data. (January 15, 2017). Tax revenue from medical and adult use marijuana in the United States in 2017 and 2020 (in billion U.S. dollars) [Graph]. In Statista. Retrieved November 01, 2019

[iv] Marijuana Business Daily. (May 16, 2017). Number of cannabis businesses in the U.S. as of 2017 [Graph]. In Statista. Retrieved November 01, 2019

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