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Medical Marijuana Payment Processing
B2B Vault Episode 68: Cannabis & CBD Payment Processing In Honor Of 420

Written by Allen Kopelman

April 21, 2022

Video Transcription

Hey everybody, it’s Justin with B2B vault: The Payment Technology Podcast with your host, Allen Kopelman. We’ll provide educational information about business payments, FinTech, decentralized finance, and the technology businesses need in today’s world.

In today’s episode. We will be talking about cannabis payment processing in honor of 420. So happy 420, everyone out there. Enjoy your splits, blonde, bonks, blunts, whatever. However, you’d like to go about it. Go ahead and pass the Dutchie to the left-hand side real quick. I want to say, uh, you know, before we get into the cereal, you know, like the happy-go-lucky stuff and everybody’s celebrating.

Before let’s not forget about all the black and brown folks formerly and currently incarcerated for helping normalize, legalize, and decriminalize cannabis. Don’t forget about the privileges we hold today while celebrating, you know, so I’m sorry for getting a little down; I’m just saying.

Everyone’s out here enjoying cannabis freely while a considerable number of people are still incarcerated for a plant. And that’s it for me. I’m out. You go, Allen, you take over. Oh, so we wanted to start the podcast on a slightly lighter note after going over some heavy stuff. Yeah. There are too many people in jail for plants.

Thank goodness. At least in Florida, there’s legalized medical marijuana. So if people want to get it, they can get a card, walk into a shop and get marijuana. That’s at least safe. Yes. Safe. You don’t have to worry about like there’s fentanyl on it or other things that are not supposed to be on your marijuana.

Thank goodness for that. So we asked people to send us a list of what they thought was cool. Movies to start with, and then we’ll get into the payment processing. So what was your favorite film, though? My favorite movie for cannabis, I don’t know. Well, old-time movie since I’m a lot older than you.

I’d have to go with up in smoke because that was like the first one, besides, you know, the reef. I mean, you can’t go wrong with the smoke. Right, right. You can’t go wrong with up in smoke. Right. So up in smoke, that was like the classic, you know, crazy, Cheech and Chong. I mean, they’re the original.

You know, partiers for sure. Each child. I mean, nobody partied harder than those two. I remember. I’m 42, so that’s a little bit before my time. I have watched up in smoke—what’s up, moms. I know you’re indulging in 420 today.

I have to say that craziness is like pineapple express. That was insane. That was insane. I mean, Seth Rogan, I don’t know. We’d have to go back to every movie Seth Rogan was a part of. I think Seth Rogan is firing up the weed and almost every. Yeah. I mean, mine, I guess mine would be, my favorite would be how high cause that’s a that’s with method man and Redman.

It’s kind of my generation. And then before, I guess, would be half-baked and then coming in third Friday. Yeah. And then we were talking about the big Lebowski now. I don’t know Snoop. Dogg’s not in any movies, but he’s probably one of the most famous celebrities for smoking weed.

In the breakfast club, The famous scene in the library for the fire up the weed. Yeah. There’s one scene in the library where they smoke pot. Everybody gets high and half baked and dazed and confused, which I was dazed and confused when we looked it up today, and I said, wow, it was made in 1993, but the movie’s premise was based in the seventies. Oh, right, right, right.

Right. Jason London and Matthew McConaughey. I think even Ben, Aflac is in that movie. No kidding. Yeah. He’s like a young Ben Aflac. I was 13. So they were like the majority; everybody, except Matthew McConaughey, was in high school. Everybody. They were all in high school. So that was kind of, and he was the older guy.

So that’s kind of, you know, they had dazed and confused, how high breakfast club, pineapple express, Friday and the big Lebowski. I’m sure we can name many Seth Rogan movies. I mean, Seth Rogan, he was in that movie where he got that girl pregnant. He smoked pot in that movie. He got married to that woman who was cannabis.

Okay. He was in the movie where, and I can’t even remember the name of this one, where he gets married to the woman. She’s the secretary of state, but she becomes the present. They got high. So he’s off. I don’t know. He’s all about the cannabis shut out Afro man because of all right. So let’s talk about, and we’ve talked about this on a few podcasts, you know, what do they do?

Cannabis medicine is what can be done for payment processing. So, I just finished up a phone call on four 20. What better day to have a phone call with a payment processor was talking about cannabis, CBD Delta 8, and Kratom. That’s what the whole call was about. So we’re talking about that.

And one of the things on the call was, you know, what is the likelihood that we’ll see cannabis become legalized across the United States? And the other thing was. You know, the two we did, we just did a podcast and the payment trends. And we were talking about the farm bill 2023. And what was going to go on and farm bill 2023?

Are they going to raise the CBD, the THC level from 0.3% up to 1%? And what’s going on with that? And we talked about Delta eight, which was on the call today too. And I was surprised, and they said now 26 states, the attorney generals have. Uh, Delta eight. So the F the farm bill needs to do something about that.

Delta eight needs to be addressed to something, and then Texas. So that makes 27 states where it’s and the, and the firing range. And then, as far as the cannabis went, they feel, I mean, those 27 states, did he say how many. You have cannabis, like yeah. Many of them have a lot of them have legalized cannabis makes no sense.

It doesn’t make the stove. The whole thing is weird. No, because basically, the problem I think they see with the CBD and the Delta eight is that it’s being sold everywhere. Buying it in vape shops, gas stations, smoke shops, and beauty salons sell CBD. I mean, I was talking to a guy this morning.

He’s like, oh yeah, I have this tanning salon. And there, they want to, and the processor wants to shut them down because they’re selling CBD and the tanning salon, and they got a chargeback. So that’s kind of crazy. Yeah. So, you know, they feel like maybe before the 2024 elections. The current administration might try to legalize cannabis personally.

I think cannabis should be legalized. We have an enormous amount of federal debt, and that can kind of take care of the problem-free the plant man wasn’t can take care of a lot of, a lot of issues, you know, especially the, you know, taxes. Yeah, it can do a lot of deficit. Just imagine, look at what Colorado is doing with it.

Colorado is spending that money on roads, schools, and homelessness as far as the infrastructure. And you’re doing great. I wonder what they’re doing with it in California because California is not doing it. It doesn’t look like they’re collecting a ton of tax. They have the highest taxes on cannabis, and most of it’s collected at the county level.

Not even on the state level, it’s at. So I have no idea what’s going on. If you’re in California and want to know where the money’s going, don’t you think. Hey, find out where the money’s going. Exactly. They need a new governor. That’s not a hard thing to find out. No, but something needs to change.

Yeah. Something needs to change over there. They’ve had cannabis legal the longest and have the money. They have a lot of social issues there in that state, but, uh, you know, for cannabis, you know, if you have an existing dispensary, basically the only, you know, you can take cash, you can take.

Some places were taking crypto, but now I just read an article that they’re starting to go after the crypto company. Who was funding helping sell cannabis? So that’s like a little bit in the gray zone now. Jeez. So you can still put an ATM in your business. Cashless ATM.

That’s pretty much like the two legal solutions; for accountability with the ATM. Put the ATM in there. And so the clients can get them, if you, you know, if you’re a dispensary and you need to, you know, ATM. And their people come in, get the cash-out, and pay you for your product. And we supply the ATM and the cash, or an a depending on how we can work it out.

The cashless ATM thing is more complicated, but it still works to send that. Yeah, it works the same, instead of spitting out money. It spits out a piece of paper. Like in the old days, they used to call those a script. So it’s the same, same principle, and it works fine. And you know, so, you know, what’s going on.

What’s the latest with CBD. So we had a meeting today with one of the banks we work with. It’s always exciting. They’re running a pilot program with CBD. One of the things they were talking about was an operation. This operation is CBD deceit, the FTC’s program where they monitor advertising. And they talked about that as usual, which I’ve talked about on many podcasts about how.

The biggest problems with CBD stem from how it’s being advertised. Oh, right. Yeah. So you know that, you know, they were talking about that and their pilot program and how now they’re going to accept merchants. So they put merchants into three categories. Category one is if you’re selling 50% or more of the items you sell, which is for retail and e-commerce.

Uh, 50% of your items or more are CBD-related. You go into whatever level one level two is. If you were sold other things, like, let’s say you’re a smoke shop, but you have CBD. So, it’s fifth less than 50% of what you, you know, your revenue is derived from. And you know, who’s going to check that, but they don’t have a way to prevent that.

You know, pretty much wide open, and then you went into category two. So you added a lesser amount of things that you had to do to get qualified for that. And then level three was if you sold items that supported the industry, Which we’re already doing anyway. Now you can get, you know, backed into the industry, people selling, you know, wholesale products into the CBD, into the cannabis industry.

We’re already getting people, merchant accounts for that for a couple of years, and even the doctor’s office. Uh, neck, give out the prescription for the medical marijuana. We get those set up all the time. So some of the products that they were talking about allow everything. I didn’t get an answer on the e-commerce on this one, but they will allow retail.

So that’s, that’s pretty exciting because there’s a lot of stores out there that have them, and they don’t have credit card processing. I don’t even know what it is. Yeah. It’s confusing. Some kind of. Asia. I don’t know. Well, they’re going to, into to the plants, man. They’re going to allow it’s a plant. Oh, is it?

Yeah, it’s poignant. I don’t know, but I don’t know much about it, but they’re going to allow it. So the bank allows it. Whoops. Have you sold, kratom shop, and you need credit card processing, hit us up. We can help you, right? No problem. Delta eight. They will allow that as long as it’s not in one of 2016.

If you’re not in one of them for now until the new farm bill comes out, hopefully, it corrects that and then puts a definite spin on what it is. But there are going to want to see them, the test on the Delta eight, and make sure that it’s 0.3 THC by dry weight. Okay. Listen, the test is the test.

I don’t get it into that, but they’re allowing for edibles, which a lot of companies are not allowing. So they’re allowing for edibles online. And the ad is online as we can today. Yeah. They’re going to let that. Yeah. They only invited a select group of people who have experience with the product to start offering it.

So can open it up to like the masses. There are quite a few people on the call, but we’ve been doing CBD. Since the farm bill started a few years ago, three, four years ago. We started with the CBD new and CBD hemp companies, hemp farms, uh, related companies to the, so why do you think they did that?

Do you think that they’re trying to gear up for the legalization of marijuana or that particular bank is the one that’s allowing the ATMs and the marijuana shop? The same bank. So I say that bank is ready to say, listen, we’re yeah, they’re moving forward. They’re moving forward. And they’re moving towards, you know, legalizing marijuana, marijuana.

And, you know, we’ve talked to other companies; a few companies in Canada are already setting up shop in the U S because they already have the system built out so that they can swipe the driver’s license or scan the driver’s license. And then run the credit card and tie the two together, you know, in a transaction.

So those companies are already setting up shop in the US. I’ve talked to two big companies in Canada. The process probably 90% of the cannabis transactions in Canada. And there, they’re already setting up, and they’re getting their ducks in a row. They’re getting all their software for the US market because the credit cards to force the POS or the credit card machine works in Canada doesn’t mean it works here.

It’s stuff that works here. It doesn’t always work because it’s two different, completely different systems. Right. So they’re getting everything set up to move forward with that, which is, you know, Us currency, they take the Canadian dollar. Unless you’re in Canada, they will take care of it, but you can have merchant accounts that process Canadian dollars and US dollars in Canada.

So one thing that’s crazy, but like in the US, if somebody comes from outside the country, you know, it’s run in a form. As a foreign credit card. Right? So this company real quick, I’m just, I didn’t mean to cut you off. So they were about to be, so we’re going to be able to hook up, like, say they’re selling CBD online.

Are we going to be able to help customers get their E-commerce shops running? Yup. Yup. With fewer product restrictions than the other banks have. I can dig it. So many of the banks that we’re working with started, they have a lot, some of them have a lot of product restrictions.

Their main limitation is the FTC advertising restrictions. So they’re going to be checking the language on the website. They’re going to recheck when you say language, and you can’t say CBD cures arthritis, right. You could say it makes you feel good, but you can’t say CBD cures arthritis or helps cure EDD unless it’s scientifically founded.

Yeah, it’s not going to happen. I don’t think meme CBD makes you happy. I guess you could put that on there, but they said that you could say that, but they were talking about, you know, claims medical claims. So that’s being watched with this CBD deceit, the program that started in 2020.

That’s where the crackdown started from the FTC. And, you know, they taught, they went through the whole thing that I always talk about with, you know, Justin’s Herbie million dollars. It starts with the plant with the USDA, the monitoring, the plans, the FTCs monitoring, and the FDA monitors the labels.

And you know, now the labels are required to have a QR code on there so that the person who’s buying it, especially in a retail environment, can see the test certificate, the COA certificate. So, if somebody you know, and they’re going to collect all of those from the merchant, which shouldn’t be that hard, the merchant should be able to prepare like a spreadsheet.

And go to each product, get the link, and stick it on the spreadsheets. So that shouldn’t be that difficult. I would think that most of the manufacturers were buying this stuff because, in the last few years, I believe that business from a manufacturing standpoint it’s shrunk down. The white labeling has gone away because the testing is so expensive to do this testing.

You have to test every batch. So small. You know, let’s say Justin wants to start a CBD company. It’s going to be way too expensive for him to private label everything because he would have to get everything tested. Right. And another thing that they’re looking at is also, and, you know, CBD con Isaac, the, I believe the shelf life is about.

So, um, no, that’s what they were talking about. So they spoke of the flower, not the flower, the stuff in the bottles. There’s like an expiration date talking about that. Oh, like the oils and things like that. Yeah. That some of them have expiration dates. I mean, olive oil has expiration dates. No.

So they said they have monitoring, you know, I liked it when I talked to the processors, and we spoke to them about compliance. So they also work in the firearms, and I’ve worked with firearms before, too. And you know, so there’s a level of compliance with firearms.

So they’re used to doing a certain level of compliance, and merchants are good. It’s going to have to get used to it. Just like they do their PCI compliance every year, merchants who go into this program will have. Keep their S their certificates up to date. And every year, or every six months, whenever they’re changing out their product, they’re going to have to upload new certificates to the compliance website.

They’re making it pretty easy for the merchant to maintain compliance, which is essential and exciting that they will accept kratom. Um, I’ll um, I asked if they would take kratom online. They said they were going to check on that.

Uh, the market is just a ton of websites for kratom. They’re only taking alternative payments right now, like cryptocurrency or checks. Mayo by chick mail by check or ACH, if they can find a company that will do it, you know, and they’re also, the merchants have to show like their social media and get all their social media handles, and they’re going to be monitored.

And they’re using a third-party monitoring company. That’s monitoring that. So, you know, I think it’s a, I think it’s a good, solid think. It’s a good solid program for merchants, especially if you want to be compliant and get a good merchant account with decent pricing. And you know, that one caveat was, um, they’re not accepting any startups.

So people have to do 30,000 a month in sales. We have another bank we work with that does take a startup company. But at the same time, if it’s a well-funded startup that they would consider, you know, somebody that was a well-funded startup, there’s always a, there’s always an exception to all the rules, money talks and right.

So somebody came in the, you know, someone came in, and they had a big fat bank account and a big company. And now they’re going to start stepping into the CBD, but many companies have problems. Like we had companies that had issues where they sold. Cough medicine and like all this stuff. And then they had one or two CBD products and, you know, we had to take them to a bank that would accept, you know, okay.

That is a small amount. So they had to switch the entire bank. Yeah. That’s a switch. I have one company that I signed up for; they had products that had CBD in them, but they had zero THC. And then it was a lip balm. They lost their banking. Also, I don’t want to say where they were banking because they also were doing the merchant services there and saw it on their website. They got a letter, and the guy reached out to me a couple of years ago; they’re still a client, and we were able to take them, you know, we sent the documentation over to another bank that we work with or like, look, they do a ton of business, six figures a month, a lot of six figures.

Almost a half a million a month in beauty products. And they have this one line of lip balm that has CBD in it. The bank was like, that’s not even going to be 1% of their sales, so they didn’t care. They just took the account. It also came up during the call that merchants have problems with different merchants’ Cannabis Payment Processing.

I’ve seen bars selling CBD, like vapes. Yeah. And they’re also taking like vape CBD vape. That’s hard to get approved, and they will accept those products. Yeah. And I’m waiting to see as they said; I wonder what happened?

They, well, the company, got different spots or banks. And like I said, that sponsor bank has been putting as one of the banks allowing for ATMs and cannabis locations. Okay. Right, right, right. Everything comes down to this like we always talk about high-risk credit card processing.

Right? So one of the things we always talk about with high-risk credit card processing is, oh, why does this bank, that bank? Why don’t they do it? Why does the bank do this? You know, because it all comes down to compliance. A bank takes, adult accounts require a certain level of compliance, you know, and only fans primarily caused that.

Uh, you know, so, you know, MasterCard and visa came up with compliance that everybody has to be registered. It wasn’t just only fans. It was the other porn hub also. So you had a, there’s a level of compliance have to know who’s in all these videos because they’re people are earning money from it. Right. Because of that, there’s a level of compliance, the same thing, firearms, there’s a level of compliance.

So it’s just a matter of the bank. Comfortable with that, uh, that they’re going to be able to have a compliance product. And there are a couple of companies that do this type of compliance in the market, and it’s, you know, semi costly. And the other thing is they’re allowing for cash discounts on these products.

So that’s good where the merchants can get the machines that pass the fee to the customers. So, you know, you’re paying, you know, you want to charge your customers three and a half to 4%. Do they cover your credit card processing fees and all the fees associated with the program? No. Going to get that covered too, you know, like, so it’s, it’s very open to the whole, to the whole thing.

And it’s a great, and it’s great that you know, another bank, they waited until 420 to make the announcement. I thought that was cool. We had the podcast scheduled for 420, and the meeting was at three. So I gathered up my information. We’ll have to go through some training, and then we’re on our way.

So. You know, there’s more hope. There’s hope every day; as I say, the payment business’s changing all the time. It’s a moving target. That’s why we have the podcast B2B vault payment technology podcasts to keep merchants informed about what’s going on in payment processing. And.

That’s today’s podcast. Did you get something to add? Well, I mean, first we want to thank our sponsors. The payment advisory board, NPS bank, NPS printer, this last one nationwide payment systems. Thank you. You’re the one that keeps the lights on and the water running and the film filming. Yeah, it’s 420.

I can’t wait to get out of here.

All right. Other than that, uh, I don’t know. Good luck joining our moving list. Oh yeah, man, if you haven’t seen any of those movies, you should definitely. I told Samantha that she definitely should watch Samantha, our graphic designer. Um, she does all this stuff behind it. You see the beautiful artwork and whatnot graphics on it.

So she does; she’s killing it. I told her she should watch the big Lebowski, this timeless classic, um, I don’t know. I’ve been smoked here. That’s half-baked is there too. So if you have a favorite movie that we didn’t mention, a favorite musician, Johnny Cash, my favorite music, is constantly stoned.

That’s constantly stoned. I don’t know. I don’t know if there’s a musician like I love the Eagles. One of my favorite poems, we stoned all the time. They probably were smoking. Back in the day, you know, the wacky tobacky yup. The Eagles, who knows the Eagles, like Leonard Skinner, then the party, they looked the Jack Daniels.

Yeah. Leonard Skinner probably liked the cannabis. Then they’re from Florida. Okay. A friend of mine has a shell tonight at the Anderson in Miami. So it’s Peter Tosh data on here. If you guys are in Miami and he listened to the podcast, go ahead and check that out at the Anderson. All right, that’s it.

Check out B2B, bald, that info for all the past episodes; you can catch up with them there. Um, you can also fill out a form to get in touch with Allen or possibly be a guest on a podcast and sponsorship opportunities. If you want to sponsor the podcast, you want to give us some money or clothes.

We’re all good with that. We can take it. We’re we’re we’re we’re open. We’re available for business on 420. And if you need a merchant account for cannabis Payment Processing. Cannabis business. You need to get up with CBD payment processing for retail or e-commerce kratom processing. Let us know.

You can go to the like Jason Justin said, go to the website, B2B fault.info and get in touch with us. Oh yeah, I know. All right. We’re at carpet DM peace out Happy 420!!! Have a great day.

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