The cannabis business is in high demand, with many people turning to the herb for managing different health conditions. With the legalization of medical marijuana, the cannabis industry has experienced a boom. Incidentally, it has prompted many people to invest in the cannabis business.
If you are an established cannabis entrepreneur or a newbie, you would have experienced the first brickbat in the form of complicated banking and payment processing, which can make it challenging to find a foothold in the weed industry.
You have to either seek a cannabis software company’s assistance or rely on the cash-only option for smooth business transactions. Since cannabis is illegal at a federal level, using banks for cannabis industry transactions can become difficult. In such a case, you need another alternative.
Cryptocurrency can become a savior to the weed industry. Do you wish to know how? Then, read ahead.
Banking Issues Faced By Cannabis Industry
Vaguely mentioning the banking issues faced by cannabis entrepreneurs may not offer you a complete picture. Working in the cannabis industry means facing new challenges associated with payment processing. Some of the common banking problems are:
- Finding a bank to work with the cannabis business itself is a challenging task. Suppose you find one. Your account always faces the risk of shutting down with a moment’s notice.
- Payment processing is a nightmare, especially if you have a startup company. Startup companies may not have a payment processing history. It means if the payment processor decides on banning you, the business will suffer. Your business cannot accept credit cards temporarily, leaving the future of your startup in a lurch.
- On top of that, you need to pay high processing fees. The cannabis industry faces significantly higher processing charges compared to other commercial activities. Most cannabis entrepreneurs have to shell out 4% to 6% processing fees. It is three times greater than what other industries pay.
- With credit card companies and banks giving a stink eye to the cannabis industry, most entrepreneurs rely on cash transactions. Cash-only transactions are complicated and dangerous. It is an inconvenient option that can limit weed business growth.
What is the solution to make sure your cannabis business can run smoothly? Please meet cryptocurrency, the potential guardian of the cannabis business. You can keep your business up and running with the digital currency payment option.
Reasons Why You Need To Consider Crypto For Cannabis Business
You may have heard about the volatile nature of cryptocurrencies. It can create an aversion in your mind regarding cryptocurrencies. There are some solid reasons to turn to cryptocurrencies for scaling your CBD or THC business and attracting customers worldwide.
- Needs No Support From Banks
While some countries like Australia, Brazil, New Zealand, and others have legalized the use of medical marijuana, its illegal status in many countries across the world makes pot-related financial transactions complicated. The federal restrictions make it difficult to complete digital payments and the use of credit cards for the transaction. But, you can avoid the payment issue by turning to cryptocurrencies. Irrespective of banks offering support to your business or not, you can turn to cryptocurrency that needs no bank’s approval to complete the transaction. Also, using the cryptocurrency for trading Lazarus Naturals CBD or marijuana is nowhere illegal. Since crypto never relies on an intermediary, you can avoid bank-related hassles.
- Makes B2B Transactions Simpler
You have several payment transactions happening in the cannabis supply chain. A vendor has to pay the growers and transporters. Payment is also needed for third-party lab certification, licensing, and selling it to retailers. Dealing with cash can make the whole process complicated. Furthermore, the strict regulations related to the cannabis business can make the supply chain expensive. Instead, you can switch to cryptocurrencies to simplify the B2B transactions and make sense of it. You never have to worry about carrying a huge amount of cash to purchase fertilizers or equipment for growing cannabis. Cryptocurrency allows you to complete a B2B transaction with a few clicks.
- Allows Your Business To Broaden Horizons
Are you planning to attract international customers to your weed business? Under conventional transaction systems, cannabis vendors need to put up with exuberant taxes. A transaction using crypto bills can take away any stress related to location-dependent payments. Also, crypto transactions can bypass certain taxes linked to the traditional transaction methods. You can complete business processes faster. Cryptocurrency is also more accessible compared to other payment methods. With a simplified transaction process, you can broaden your business horizons and attain goals faster.
- Low Transaction Fees
Some cannabis traders are lucky enough to arrange successful credit card processing. But, they face another business obstacle in the form of high transaction fees. Switching to cryptocurrency can lower the transaction fees. It may go down to less than 1%.
- Secure Transaction Option
A chargeback is another pitfall of a credit card payment option. It can result in merchants losing a lot of money. Since it is impossible to fight unnecessary chargebacks, you can opt for cryptocurrency to save your time and energy. You can say goodbye to chargeback fraud and fraudulent transactions. Why? It is because cryptocurrency uses blockchain. It is a decentralized digital ledger with permanent transaction records. Changing or deleting a transaction is impossible, with merchants having complete control of their funds and avoiding fraud issues. Hacking the blockchain is a nearly impossible task as converting one block means converting all blocks.
- Transparent Transaction
Crypto can become the most sought-after mode of payment due to its transparency. It guarantees the transfer of transaction details to all computers. Thanks to blockchain technology, vendors can validate transactions fast. It also maintains the authenticity of the stakeholder and makes the transaction transparent.
- Maintains Privacy
Most of the customers purchasing cannabis fear the leak of their private information when they use credit cards. The chance of landing in trouble with the law due to breaking federal law by purchasing weed can also make customers refrain from accessing cannabis. It can discourage them from buying cannabis products. Using cryptocurrency as a vendor or customer gives you anonymity and privacy. You can complete a cannabis transaction using crypto without revealing your identity. The difficulty of tracking such transactions irrespective of the mode of buying will encourage customers to purchase cannabis from physical dispensaries or online seed stores.
Conclusion
While cryptocurrency cannot transform the cannabis industry, it certainly can make an impact. It is an option worth considering when you face an uncertain banking future with cannabis transactions.
Crypto is an additional payment option that can also attract press attention and boost the weed business.
