Merchant Accounts For Cannabis Related Businesses

Hey everybody, what’s up! It’s Justin LIVE from B2B Vault, the payment technology podcast with your host, Allen Kopelman. And we’ll be providing you with educational information about business payments, FinTech, decentralized finance, and the technology businesses use in today’s world. And in today’s podcast, we’ll be discussing cannabis-related businesses and merchant services.

There are tons of developments happening. Cannabis is a huge topic. Everyone talks about it every day. Why it’s still not legalized? No one knows, especially me. I don’t know that. It’s befuddling, right? Yeah, it’s, befuddling in that, the congresses, they even tried to sneak it into a couple of bills later! Right?

The safe banking act got yanked out at the last minute. Of course, they tried to put it in the America Competes Act and another act. They tried to slide in there. Yeah. The new one. Listen, if people want cannabis, I think that they talk about it, to contact Congress. I think you got to focus on the finance committees.

So not these other committees focus, contact the Maxine waters, the financial committee for the house of representatives. It needs to start there and by asking them to push through the safe banking act already. Let’s try to push through a number of other bills and I think they’re a little bit too

Crazy! The thing about them not legalizing is it’s like the black market. By not legalizing it, you’re fueling the black market to function and to keep operating as is, and actually, they’re upscaling as we speak. So, I don’t understand it. The war on drugs has failed.

We could keep going and going. There are a thousand political podcasts about legalizing cannabis. Why it should be why it shouldn’t be, but so we’re going to focus on the payment side of it. There are a lot of technology companies out there that are building improvements on processes for these dispensaries and they’re unable to even sell the product because they can’t get merchant accounts.

Yeah, so! I don’t know, man! So, let’s talk about it, we’re going to break the podcast up into two parts. First. We’ll talk about cannabis-related businesses, and then we’ll talk a little bit about cannabis and what’s available for processing for that. But. We’ve seen a bunch lately. I’ve seen quite a few posts on Facebook and LinkedIn from companies that say, oh, I need a merchant account for a cannabis-related product.

And then, whatever, a lot of people reach out to them and tell them, oh yeah, we can do it. We can do it. Listen. I tell them, I go, you want to book a 15-minute free consultation. We’ll tell you why we’re the best one to work with this number one, we’re going, to be honest with the bank about what you sell.

And we work with banks that basically, don’t care. So, people are like what’s the difference between this bank and that bank? The difference is that when you have a bank, big banks, like B of A, Wells Fargo, and Chase, are publicly traded banks on the stock exchange. They got a board of directors, they got shareholders to answer to.

So obviously they can’t do those types of businesses and they stay away from things. They can, but they just choose not to do it. They call it the front-page test. They don’t want to end up on the front page of the newspaper or the nightly news oh, they processed for this company.

So, there are banks that are privately held. So held by a family or a few individuals. Obviously, they have a board of directors, but because it’s closely held in bank, there are fewer people to deal with when it comes to decision-making. So that’s why I say, not everything is high risk.

A lot of businesses, I call ’em niche. Like the adult business. There are, maybe four banks in the whole five in the whole us that are interested in the adult online. porn business. Got it! Okay. How many banks are there doing credit card processing dozens? Yeah. Okay. Dozens upon dozens and hundreds of ISOs.

But there are only really five players in the game, and the same thing when it comes to this, cannabis-related businesses, there are only a few players in the game that don’t really treat it as high risk. They treat it as a niche business opportunity for them they’ll process it.

And the rates are pretty much, what you would pay for a regular merchant account, maybe a tag hire, but we’re not talking about paying eight. I talked to a guy the other day and he was, they’re paying like 10% for credit card processing. I go, there’s no reason for that. Why are you? Oh, they said we’re high risk.

Okay. It’s not really, you’re not really high risk! What type of business? They were selling L E D grow lights. Wasn’t like that big of a deal, but it’s a horticulture product. So even, so how would they have known or why does that classify as high risk? Because they specifically had a website that talked about growing those, putting those grow lights on cannabis and hemp.

If they would’ve reworded something on their website would that they were trying to attract those companies well, because it’s, those are keywords. You don’t want to attract somebody selling basil yeah. And growing flowers in their greenhouse. They’re focusing on cannabis, and hemp and trying to get that. And they were selling it for, mostly. And so, banks said no way, Jose. Yeah. Banks were like they got dropped by their bank when they entered that arena. And then the guy was processing somewhere, paying like 10%. And I was like, listen, we can get you like regular processing, like around three, 3%, no problem. They were like, really? Are you kidding? I was like, no, we can do it! Amex, that’s another, they’re not going to probably go along with that, but Visa and MasterCard, no problem. Because the bank has the risk. So, they’re accepting the risk and they see okay, as long as you don’t have, there are magic words, you can’t have like the M-word. What is that?

Marijuana, whoa. And the word weed on the website. Spooky man! We had another guy that was selling, they were selling, they had cigar website and they were selling, they decided that they were going to sell, they made a new humidor. Yeah. We’ve mentioned this on a podcast. and the humidor, it was like, keep your weed fresh.

And they got shut off! Like by the bank immediately, they were shut off. Oh, why did we get shut off? I start, I went into there, I went in, I saw this image on the site and I started laughing, running so hard. I was like, come on, man. You can’t have that on your website. The wording is everything. The wording is everything. The, so we, we took ’em to a different bank and the bank was like, yeah, like you got to change that word. Can’t have that on there. Got it. Keeps your weed fresh. And then a bunch of blog posts about it and keep customers commenting. How was cannabis? So, you can’t. You could say it just keeps your cannabis product

fresh! You could say that? Yes! You could say that, but you couldn’t say I don’t like marijuana, I guess they don’t like it. That is the word they don’t like the wording. Really? Yeah. It’s like they, they prefer people using I don’t, yet marijuana has a whole stigmatism behind it, the word like it, it’s all ah, run for the Hills!

Yeah. The same. You’re smoking marijuana! And we’ve seen doctors that get shut off because paying, they’re doing the card and the, for the con a lot of states have they’re what the medical marijuana card. So they’re the guys that give patients the medical marijuana card? And then they get shut off by the bank because the bank doesn’t want to do business with them, say, oh, maybe. Why would they get shut off?

Cause they don’t want to be related to that whole cannabis business. How could doctors they can’t even get away from that? They, their medical marijuana licensed practitioners. Any doctor with a license, all they got to do is get set up with this approved by the state. That’s I’m saying they’re medical marijuana licensed.

They got to be certified by the state to give you an MMJ card. So, we just got processing all the. Okay. They can shut off and they get, we, we get phone calls. We go, yep! We can get you set up right away! No problem! So, you have a bank that deals with those types of businesses specifically? Yeah, they deal.

Yeah. They don’t care if it’s marijuana-related, even like hemp rolling papers, it’s not it’s hemp. But nobody wants to, regular bank is not going to process that. And the CBD bank. And PayPal isn’t either! CBD bank, that’s doing CBD. They’ll process it, but they’re going to charge you a high rate, right?

So, you can go to the cannabis-friendly bank, cannabis-related business, and friendly bank and get processed. Cause when you say cannabis, related business what does that mean? So, it means businesses that service the cannabis industry. But not actual growers? Right! Not actual cannabis. Just like the flower. You can’t be the drug dealer in your neighborhood trying to get a merchant account.

It’s not going to work. No, but some examples are. We have a company that sells vape pens specifically for that industry, not just vape in general, specific to that! Like specifically for vape pen companies? Yeah! It’s a vape pen specific for cannabis. Oh, okay. I don’t know what would make the difference. I would figure vape pens, a vape pen, but they had, they have specific brands.

So, we told the guy, put it on a different website. And we got ’em processing for that. Oh, there are specific brands that banks will process for it. No. I’m saying like, I’m saying like they sell vape pens. But that is some specific line of vape pens that was specific for cannabis. I don’t, oh THC. Yeah.

But not vape for some reason, I guess, the cartridge is different or something that goes in it or something. I don’t know. I’m not sure, but what made it specific, but they were made specifically for cannabis. So, we just had the merchant. We go, hey, put it on a, take that off this website, put it on a different website.

We’ll give you a different merchant account for that. Got it. So, they got a different merchant account for the oh, for the actual product you’re saying? Yeah, the pens the cart, the hardware, they sell the hardware the actual, not the product, but the utensil or the device that you use.

Too, right? Yes. The actual pen, not to clarify. I was, I don’t, I was very confused. I’m sorry. And the same thing, like we have another guy, they look like cotton candy cones, but it’s, the little cones so they can put the product in there so they can give people a three roll, at the dispensary.

Yeah. So, we have a guy that sells those too. They couldn’t get a merchant. With cannabis inside of it? No, it’s just the paper. Just a joint. Yeah, just a joint base. And he couldn’t get he couldn’t. Yeah. So, the guy was like, I can’t get a merchant account. I was like, no problem. We’ll have you approved in one day!

The guy was like what? He was shocked! Nice. I’m just saying there are a lot of businesses that sell things to the cannabis industry that sell glass pipes. They want to sell stuff, but they can’t. They don’t go to the right person, or they lie to the bank and use a different URL and they don’t tobacco.

They try to make everything. Yeah, hide it. They try to hide it. There’s no reason to hide it. I always say tell the truth to the bank. Honesty is the best policy. And there are plenty of companies selling all kinds of stuff. Another guy contacts us recently, fertilizer. Okay. Couldn’t get a merchant account because on his website it was fertilizer for cannabis.

So, nobody wanted to process it. So, we told them, we’re still trying to work on that. being very particular about some integration we told ’em we can get ’em to integrations. Don’t work, oh, that company is being particular. Yeah, they’re being, they’re not the bank. No, the bank said they would take the deal.

No problem. They’re selling, it’s easy. Like they’re, it’s only, they’re not selling cannabis. What are they trying to integrate? If you don’t ask me? Oh, they’re trying to integrate into Microsoft dynamic. So, they need a gateway that integrates to Microsoft dynamics, which is no problem. The bank is compatible with that software.

What are Microsoft dynamics? It’s like a CRM slash inventory system. I was going to ask; it’s got to be some sort of inventory. Yeah. They call it like E R P okay. It’s a procurement software

connected to the website and their warehouse and, oh, somebody orders it, it goes to the warehouse. The guy knows, oh, box this up, send it to Justin, are most company. Whatever. No, it just seemed weird to me that nobody would process for it.

I said, yeah, we can get you processing. No problem. They’re you know, we have another company doing it. Stop dragging your feet. Exactly. Start making some money. Another one was a magazine. So, we’ve got a couple of magazines. Yeah. And they want to take hell anything you smoking the magazine? No, they just don’t want to be related to that’s how we got.

Processing the guy’s magazine. Like the magazine are like every paper you roll a joint out of or something. No, it’s just the cannabis magazine. So that would be cool but sell advertising and they sell advertising for cannabis stuff, cannabis-related customers, and they couldn’t get a merchant account.

They got a merchant account, but they got shut off. When the banks saw what kind of magazine it was. I wonder what was this happening. Was this type of situation happening to liquor companies during prohibition? There was no credit card for processing in the 1940s. You’re talking about word banks like, oh, gimme I’m not taking that money.

You were selling whiskey, maybe. Yeah. I don’t know. Wasn’t I not that. I doubt it. that’s how New York, Chicago. But they were probably all dealing in cash. That’s what I’m saying. I’m how would they know where the cash came from? No, I get that part, but I’m just saying I wonder if could, it’s just funny, right?

It’s just No, it’s sad because you got some drunk guy that’s running, falling over, and doing reckless stuff. And some guys just smoking a joint, laughing, eating a piece of pizza and that’s wrong. Yeah. I don’t know who am I? So, there are all kinds of, and there’s like magazine subscriptions to the magazine.

So that sounds ridiculous! So, we got them a merchant account. The guy was actually in shock. They were paying some guy like 12%. Really processing. Yeah. We were like, oh, we could get it much lower. We got it down in the three. Good for him. So, it’s basically I look at a lot of business types. Like they’re just a niche type of business, it’s a niche business you have what is CRB, sir?

CRV where I write that CRB company, CRB cannabis-related business, or. Short-term memory loss or it could be marijuana-related business, but they like the word cannabis better. So, because the cannabis culture does not want it to be referred to as marijuana. So, war pot? Right! So, we just refer to it as cannabis.

So, there are all kinds of companies, business-to-business companies, distributors, wholesalers, and smoke shops. E-commerce well, a smoke shop, a regular smoke shop. That’s selling CBD. Yeah, we could deal with types. Was that considered cannabis-related? No. These are just businesses that sell to the cannabis industry.

So, like a CBD company. Yeah. That’s separate. We can do CBD also, but we’re not talking about that. We’re just talking about cannabis today and cannabis-related businesses. So, businesses who sell things into the cannabis market, there’s all, we had another guy that was selling.

What about T-shirts? Yeah, same thing! So, if a shirt says I smoke cannabis a merchant, a bank will be like, no way, Jose. Yeah. We had a, we have a guy that sells they have a whole website with promotional material, and they’ll print shirts for your dispense. Anyone who’s selling two dispensaries. Yes. And two dispensaries or two growers.

Those are cannabis-related businesses, and we can help you. Yes, we can help you. We have two banks, maybe three now that are accepting that type of business. And if you already have a merchant account and you’re getting, you’re paying way too much, whacked over the head, we can help you in guarantee you don’t need to use a high-risk provider

that’s charging you eight, nine, 10%. Do you hear him? Yeah. You don’t need to go through that. Yeah, you don’t need to go through that. You can go, you can get a regular bank. Like I said, not everything’s high-risk, dull firearms. Hold on. Before you get into all that. Okay. First of all, we want to thank all of our listeners from the B2B Vault community for tuning in every week.

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Yeah. It’s crazy that we’re almost there! So now let’s get into a short discussion about cannabis and what is available for the cannabis market when it comes to payment processing. So, what can you do? You can use what we call a micro-ATM or cashless ATM that basically spits out a piece of paper, but it’s on the ATM network, not on the debit network.

It’s treated, it’s just like an ATM transaction where you’re going to pay an ATM surcharge. Got it. And you might get hit with your customer, might get hit with a fee from their bank. So that’s just, that’s one option. You can put an ATM that dispenses cash in your business, and we can help you do that.

And then there are some companies, some new companies are coming at that similar to Zelle where you can get a transaction, then you connect to your bank account, you log into your bank account, you can do like a bank account transfer. There are a few FinTech companies that are like getting into that space a little bit.

Sounds cool. And listen, when we can get Maxine Waters, Hey Maxine, if you want to come on the show, we’d love to have you. Or Senator Durbin would love to discuss the safe banking act or somebody maybe Janet Yellen, from, we should tag them all on Twitter. How about all three of them?

Well yeah, we’ll get ’em all three at the same time. Maybe even get like AOC and do a tag team. Yeah, we’ll get like a bunch to the debt. Anybody from Congress, whoever loses has to legalize cannabis, anybody from Congress wants to come on the show. We’ll discuss credit card processing and the safe banking act. So on and so forth with you.

The cannabis industry it’s growing as more states are legalizing either recreational or medical marijuana. Yeah. I think that it’s time for the government to step up and come out with some rules. And regulations and legalized banking. We’ve talked about this on other podcasts. These business owners we’ll have, Allen and I were just talking the other day about like how sketchy it would be to be a dispensary owner, right?

Like you’re sitting on who knows how much cash you have. You got all this cash; you go into these different. Shady independently owned banking places to stash the money. It just seems so dangerous. And like I saw one of those, it seems just reckless to me as to why the government wouldn’t move forward in making this safer, for the public and the business owner.

I, yeah, it’s just for and collects the tax too. New York is looking to create a program that they’re going to tax the crap out of legal cash. You should see it in California. There are some counties where the tax in the dispensaries is over 30%. And that’s crazy. That’s just the county, but that’s also fueling the black market.

That’s stopping regular people who want to do the man, so like my mom’s been smoking cannabis before I was born. So just to imagine, like all of the shady things that she’s had to go through, just so that she could go get a plant that because my mom suffers from anxiety really bad.

So, she smokes marijuana or cannabis too, and you would know the difference between my mom if she didn’t smoke. And if she. and even the drugs that they would give her it wouldn’t be the same. Like cannabis helped her. And so just to think of all the, like all the moms who are, sneaking around, but it’s okay to go get messed up off two bottles of wine and drive your car into a ditch in Napa Valley.

No, it’s messed up. No, listen, it’s ridiculous! It’s time the government, stepped up and make specific changes. Listen, they got to come up with like in Florida you can get a medical card. Okay. And then it limits how much you can buy. Listen, if they do that. Which is stupid too, because how can you tell someone how much they can consume?

They don’t do that with alcohol/ No, I know you can go and drink yourself to death. Right now. I can go to and spend my life savings at a liquor store and that guy, the owner he’ll let me do it gladly. But if some guy’s going through cancer. Patient, you can only smoke an ounce a month. I don’t know. I don’t know what the limit is.

I don’t know what the limit is. It’s I don’t either. Cause I would never let someone tell you. So compared to like allergy medication, you go into the store to get some Claritin. You got to give ’em your driver’s license, they check it through a database, make, start cooking meth to make sure that you have didn’t buy too much Claritin in this month.

Apparently, people were taking it and crushing it up, and cooking meth. Whatever they were doing with one ingredient. I don’t know if Claritin is one of those ingredients, but I know it’s like Robitussin, I don’t know. It’s one of those, like over-the-counter medicines? No, it’s all the allergy pills. Yeah.

The allergy antihistamines and everything. Yeah. When you go to the store to buy one, you have to buy it from the pharmacy. They, yeah, but you can go to the liquor store and get 40 ounces. Needs to be, there needs to be, they need to fix it. I just don’t agree with it at all. I would hope in my lifetime that they fix the cannabis law.

I do too, man. Stuff, Sorry! So, for my kid’s sake. And we’ll talk, we’ll touch on CBD a little bit and we can process CBD. We do a ton of what we call niche businesses, right! And that’s, where we find a lot of our business is helping these niche companies connect with the right banks and the right processors, the companies that are labeled high risk.

And most like he’s been telling me like most of the time, they’re not even really high risk. It’s just that they’re getting, screwed over by these other merchants. Okay. Yeah. Well, It’s not that they go to companies and they believe they tell ’em, oh, it’s high risk and you got to pay this much money.

There’s just, there are banks out there that offer reasonable pricing, obviously, they want to make sure, the person has good credit and they’re doing a good amount of volume and all that. But there’s, you can get really good rates for CBD for cannabis-related businesses.

There’s a bank now, like saying they’re going to do Kratom. You get waiting for the paperwork but saying they’re going to allow Kratom for retail, one bank’s already allowing it for retail. What about that? Like in Nevada we were, oh yeah, that was crazy. So, in Nevada, they’re going to be Colorado approved.

They approved lounges for me for cannabis consumption. So, I’m thinking, how are those? I wonder how those lounges or, Clubs. Yeah. I don’t know how they’re going to work that because are you going to have to buy it and then smoke it there? Or can you just bring your own and then smoke it at the place? I’m sure it’d be, bring your own type of deal and purchase.

It’ll have to, we’re going to follow that and see, but I’m just wondering like the membership, I wonder how they’re, I wonder how they’re getting paid. Like how are they like, cause to be, because anybody could just go buy a warehouse, right? And then open a marijuana cannabis consumption lounge.

Probably a cannabis-related business, but as long as you’re not selling cannabis, it’s a cannabis-related business. It seems like a low-level entry to a really blooming industry! Yes. I would imagine that some of the hotels would probably put in. well, hotels would be, that would be not a smart

the idea to not follow along in that at least. Back in the day, you can go to hotels and smoke anywhere and smoke in your hotel room. Not now, not anymore. Now that means certain cities. You still can’t. no Vegas, like in Vegas, like on the casino, they have a smoking part of the casino and a non-smoking part of the casino.

Oh really? Yeah. And then, and yeah, all most casinos have non-smoking areas I’ve never been to, and I’m not a gambler but I’ve been to Vegas for conventions. I’ll shoot the five. And then they ha but I’m just saying, so I would imagine that at some point, listen, I go to a nightclub like we have clients that have a nightclub.

I would say almost every nightclub now has signs up, no smoking marijuana, no smoking cannabis in the nightclub because there are people, everywhere, they got these vape pens now, and it’s in the vape pen. You need to stop that. They can’t stop it. They’re just trying to curb it. People are still smoking cannabis outside in cars and outside of the club.

They’re just trying to prevent the people that come in and stick it in their cigarettes or inside cigars. And. and cigar paper and all that stuff. And it’s obvious, good luck. They don’t want to lose their liquor license, so they put the signs up, but they’re smoking cigarettes in there.

But I’m saying they put the sign up so that they can keep their liquor license. I would rather smoke cannabis than tobacco, any day! Oh yeah. Crazy! Cigarettes, I stopped smoking cigarettes. I’m going on, been four years in, October. Congratulations! That’s Awesome! And. Yeah, man. I cannot stand the way cigarettes smell. And the taxes on cigarettes are crazy.

Now the taxes are like their taxes, crazy. That’s another thing! You can go buy a pack of cigs, but you can’t go buy a joint. That’s crazy. That’s crazy. And you can only be 18 to buy some cigarettes. Listen, they leave, they do the safe banking act. Then the dispensaries will be able to get a really inexpensive credit card.

Cause I’m sure that banks are going to jump in, but there’s going to have. With everything, there’s going to have to be, compliance. That’s what, everything, the same thing with CBD there’s compliance. Like you want to get a CBD website hooked up. Yeah. You have to have all your, what they call their COAs, which are the tests on the site for all the batches that you sell.

So, you have to have everything you, you have to have everything up on your website so that you can be, compliant. The same thing will happen with marijuana. I just hope it happens sooner than later. So thanks for listening to B2B Vault today. And if you need to get in touch with us at B2B Vault.info, go to the site you can apply for a merchant account.

Give you a call get a phone call set up and go over your needs. You can also get in touch with us. You can also book to get an appointment booked. Thank you for listening. Connect with us on Facebook in the community. Check out some of the reels. Some people TikTok Instagram at B2B Vault follow @ B2B Vault, TikTok, Instagram, Facebook, Twitter at B2B Vault.

You can connect with a on Twitter @ Allen Kopelman and you can connect with me @ J R O W I N G S O with wings! Cause I could fly, baby! All right. Carpe Diem! Sees the Day! Peace out! Everybody, have a great day!