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Tag: cannabis

Payment Processing for Cannabis Delivery Services and Why Paying Online is Better

Posted on by Antonio Javiniar

The State of Payment Processing for Delivery in the Cannabis Industry

Let’s face it — the cannabis industry has a cash problem. Now, too much cash isn’t a bad thing; cash is still king. But, when cash is the only means of doing business – from customer transactions to paying tens of thousands of dollars in taxes exclusively in cash – it quickly becomes one of the biggest bottlenecks and security risks for the industry and its operators. 

The cause for this? Federal and local regulations make it difficult for cannabis businesses (especially those that are plant-touching) to access basic banking services and digital payment processing alternatives to cash. With the blooming cannabis industry projected to grow to $41.5 billion in retail sales by 2025, it’s important that as the industry awaits changes in federal cannabis policy, that the private sector works to make existing cash alternatives more safe, compliant, and accessible to cannabis operators. 

In this blog post, we’ll do a brief overview of cashless payments, why cannabis delivery services should implement cash alternatives today, and the existing technologies that make payment processing safe and accessible under the current state of cannabis regulations.

Intro to Banking and Cashless Payments in Cannabis

Due to constraints brought on by federal and local regulations on cannabis banking, the cannabis payment processing sector has exploded with businesses seizing the opportunity to solve the cash-only issue of the industry. With this comes many bad actors looking to make a quick buck and disappear (as does any industry), but also comes many promising companies truly looking to establish a safe, secure, and scalable payment and banking solution for cannabis operators nationwide. 

Why is this issue so important? Well, it’s an issue of efficiency and security. Without access to traditional banking services, cannabis operators often find it difficult to:

• Have a safe and secure way to store and access their cash in the same way non-cannabis businesses do

• Access capital needed to scale their operations without hefty interest rates through cash advances

• Accept more convenient ways to pay for cannabis like with credit and debit cards

• Pay their taxes and other business expenses 

And that’s just the beginning. As a “high-risk” industry that is still federally prohibited, operators can find it hard to also insure these cash assets without having to pay large premiums.

Collectively, these hurdles would undoubtedly make it more difficult for the industry to reach those projections, giving even more credence to calls for a cash-alternative solution sooner rather than later. 

Existing Methods of Cashless Accepting Payments + Risk

So if the demand is high for cash alternatives, what cashless payment solutions already exist?

Well, there are a few alternatives to cash cannabis operators can choose from. Currently, non-cash cannabis transactions can happen in a few different ways:

• Automated Clearing House (ACH)/Bank to Bank Transfers 

• Have you ever signed into your bank account through a third party to purchase cannabis? If so, you’ve just paid through ACH. ACH is simply a transfer of funds between a customer’s bank and yours (the delivery service). ACH is arguably the most secure method of handling non-cash cannabis transactions in the industry today.

• Cashless ATM Terminals

• If you’re thinking that you’ve paid for cannabis with your debit card before — you’re not wrong, but you’re not entirely correct either. Cashless ATMs are a clever workaround to solving the cash-only issue in cannabis. Instead of customers paying with their debit card, they’re actually “withdrawing” cash directly into your business bank account. Funds are debited from their account into yours equating to the amount of their order.

• Cryptocurrency

• As an emerging technology (and with the future of cryptocurrency use cases in cannabis still hazy), crypto payments are rather rare to come across. However, it is a form of payment that exists and can be used by retailers.

Each of these payment methods, of course, carry their own respective pros and cons. As more established and reputable payment processing companies enter the cannabis market, and as the industry continues to build upon non-cash alternatives, the relative risk in implementing a payment processing solution is better managed.  

The Argument for Cannabis Deliveries Going Cashless

So, why should you implement alternative methods of payment processing for your cannabis delivery service? Well, aside from it becoming an inevitable transition your cannabis delivery service will have to make eventually to meet customer expectations, implementing a payment processing solution can benefit you in multiple ways:

• Employee Safety and Risk Management

• Eliminating cash from delivery transactions minimizes the risk of cash theft. At any given moment, whether during daily delivery operations or periodic cash-only tax payments, cannabis delivery staff can be carrying with them thousands (if not tens of thousands) of dollars in cash on their person. ⁣This makes them (and you!) a high-value target for theft. Taking cash out of the equation through cashless payments mitigates this risk and creates a much safer, more convenient working environment for everyone.

• Access Banking Services

• Non-cannabis industries may take it for granted, but access to simple banking services is crucial to the future of the cannabis industry. As bigger, more reputable institutions come into the cannabis payment processing sector, more financial resources like banking become accessible to cannabis operators.

• KindTap, for example, is a closed-loop network providing merchants and customers a compliant way to pay online, thereby removing the friction of paying upon delivery or in-store pickup. By partnering with financial institutions in various states that have compliant cannabis banking programs, KindTap enables a frictionless payment solution for online transactions through a bank account-link and their own credit program.

Moreover, solutions like KindTap are actively integrating with point-of-sale technologies like WebJoint, to seamlessly fit into the customer’s natural purchasing experience and offer a non-cash payment option.

• Increased Customer Satisfaction = Increased Customer Spending

• Customers tend to spend more when they are not only happy with your service but also when they aren’t limited to the cash they have on hand. Today’s consumers pay for almost everything with their debit/credit cards – it’s more convenient and secure than cash. Though debit/credit card payments for cannabis aren’t possible just yet, there’s a reasonable expectation for operators to mimic the convenience factor that comes with it as best as possible. A successful implementation of non-cash payment alternatives will prove to be a great-long term investment for your business. 

Future of Cashless Payments in Cannabis

So what does the future of cashless payments in cannabis look like? To be quite frank, it’s hard to tell. Unfortunately, federal legalization is still up in the air and with it, regulations dictating banking services for cannabis operators hang in limbo too. 

What we can tell you, however, is that the payment processors left standing will be the institutions that place the operator’s security and accessibility to financial services, as well as the customer’s purchasing experience, at the forefront of their efforts. Existing solutions like KindTap that are thriving in today’s cannabis banking environment, revolutionizing cannabis payments, and blazing the trail towards a federally compliant cannabis payment network. 

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Cannabis Regulations in California and Elsewhere! (Overview)

Posted on by Antonio Javiniar

Cannabis regulations for cultivation, distribution, sale, and use has received a lot of attention in recent years, in most parts of the world. There is a shift in the mindset, acceptability, and general perception of the cannabis plant in recent years. Somehow, this has helped to demystify some of the long-held beliefs stemming from the U.S. War on Drugs, effectively giving room for better assessment of its benefits to society.

How exactly has the playing field changed over the years in regards to cannabis regulations? In this article, we look at the various cannabis regulations that affect different stakeholders of the cannabis industry.

General Overview

At the international platform, cannabis possession, cultivation, and supply are only allowed for medical use and scientific research. In this sense, on the world stage, generally, it is a crime to cultivate, possess, and supply cannabis. Many counties punish this crime by stringent prison terms. It was not until recently when several changes emerged on the perception and approach towards cannabis. The result of the move was an increase in the number of countries legalizing cannabis for both medical and recreational use.

Notably, though, this legalization often comes with strict guidelines on cultivation, supply, and personal consumption of cannabis. In this respect, therefore, in many places, cannabis is still not a commodity that one can access easily. 

In the United States, 11 States have legalized marijuana for recreational use, while 33 states have legalized it for medicinal purposes only. Other nations, including Canada, South Africa, Georgia, and Australia, have legalized marijuana either for medical, recreational uses, or both.

Cannabis Regulations in the United States

The USA stands out amongst many nations in its approach to regulation of cannabis use. At the Federal level, cannabis is still illegal, and there are severe penalties for trading, consumption, and possession of marijuana. 

Several states have now legalized either medical marijuana, recreational marijuana, or both. There is also a lot of diversity in the ways these states have enacted regulations on marijuana. There are specifications regarding cultivation, transportation, and even private possessions in homes across various states in the USA. Here is a highlight of multiple approaches given by just a few selected states.

California Cannabis Regulations

California became the first state to legalize cannabis use with Prop 215 back in 1996. Prop 64, which would permit the recreational sale and adult-use of cannabis, was approved by California voters in 2016. 

Prop 64 culminated in the signing of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) by the then governor, Jerry Brown, on June 27, 2017. MAUCRSA created the general legal framework for the cannabis market in California. 

The bill created the Bureau of Cannabis Control (BCC), the lead agency responsible for licensing, regulation, and enforcement of laws for all cannabis-touching operators in the state. To supplement the BCC, the California Department of Public Health (CDPH) was commissioned to regulate manufacturers and the California Department of Food and Agriculture (CDFA) was made responsible for the oversight of cultivators and implementing the state’s track-and-trace system, METRC. 

To date, California remains one of the most dynamic cannabis markets – it’s expected to be a $7.7 billion market by 2022. Cannabis is legal to persons over 21 years old. The law prohibits possession of more than 28.5 grams of cannabis in the plant form and 8 grams in the form of concentrates. The law allows cannabis consumption in private property, although landlords and property owners can set their own rules regarding cannabis consumption. Additionally, California has been one of the few states to permit state-wide cannabis delivery. The laws in California provide a template for several other states.

Cannabis Regulations In International Markets

In all the places mentioned above and others, legality, especially in regards to commercial use, varies significantly. Here is a highlight of approaches adopted by different nations.

  • In Canada, users in Ontario are only allowed to purchase marijuana over a government-run online platform. Still, in Quebec, Canada, you can smoke cannabis wherever tobacco smoking takes place. Other provinces within Canada also have specified rules. In Europe, all national governments currently oppose cannabis legalization, mainly for recreational use. There are penalties for illegal supply. Similarly, within the European Union (EU), possession of cannabis for personal use is an offense. Nonetheless, in more than a third of the nations, a prison sentence is not an acceptable penalty.
  • In Spain, there is no penalty for growing or consuming cannabis privately. But cannabis sale is still prohibited. Similar to South Africa, you can only grow and possess small amounts of cannabis for personal use as long as you meet the age requirement.
  • In the Netherlands, officials tolerate cannabis sale in shops as long as it follows specific guidelines. It is an illegal activity but not necessarily punishable. In many jurisdictions, discussions into the legalization of cannabis are at advanced stages. One can easily buy various edible twisted extracts from reputable retailers.  

 

Effects on the Social Set-Up

Statistics indicate that there are more than two million Americans under incarceration. Although it is hard to determine the exact number of people held over marijuana-related cases, in 2018, about 47.5 percent of federal prisoners (81,900) were serving a drug-related sentence.

In another report, out of 20,000 drug convictions in 2017, only 92 related to marijuana. One argument has been that most of these convictions related to minor possession of marijuana and not to trafficking or violent acts. Yet, they have a significant impact on society.

Fortunately, with the increased pace of legalization across states, more government entities are looking to amend the injustices from the past. With more states legalizing, we begin to see more licensing programs centered on social equity (giving communities affected by the War on Drugs an opportunity to be stakeholders in the legal cannabis industry) and the mass expungement of non-violent drug offenders and their records. For example, Illinois’ governor just expunged 11,000 non-violent, cannabis-related drug offenses upon the state’s legalization in 2020. 

Conclusion

Cannabis regulation, especially in older democracies, is a discussion that dates back almost a century now. In the last two decades or so, there has been a significant shift and rethinking the existing laws related to cannabis possession, growth, and distribution. Nowadays to buy cannabis seeds online, one can browse the net and choose among a plethora of strains. 

With the revelation that cannabis-based products such as a CBD have positive impacts on human health, more changes will undoubtedly come to effect going forward. At the global stage, it is clear that there is a need for a better approach to harmonize regulations passed in different jurisdictions to make them relevant across the world.

Disclaimer

The materials made available in this blog were are for informational purposes only and not for the purpose of providing legal advice. You should contact your cannabis attorney to obtain advice with respect to any particular issue or problem.

This article was written as a guest post/collaboration with Cannabis2Biz.

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What is Los Angeles’s Cannabis Social Equity Program?

Posted on by Antonio Javiniar

LA’s Social Equity Program

The explosion of cannabis and cbd marketplaces with increasing legalization led to the implementation of social equity programs to ensure communities that have been disproportionately affected by the War on Drugs have the opportunity to become stakeholders in the legal cannabis market. The enforcement of cannabis laws and its criminalization has harshly impacted people from minority communities and low-income earners for a long time. 

To address these issues around cannabis, LA is developing and enforcing new cannabis policies under LA’s Social Equity Program. This program aims to create a fair and equitable cannabis landscape to provide opportunities to individuals from communities disproportionately affected by the War on Drugs.

Read on to discover more crucial information about how this program works and who qualifies for social equity.

What Is LA’s Social Equity Program?

The main goal of this program is to reduce inequalities facing marginalized communities and promoting equitable opportunities in the cannabis industry. It will create better life outcomes for victims of the war on drugs and allow the city government to offer assistance through funding, licensing and physical space. Moreover, it gives the opportunity for those affected to participate in a booming cannabis market – allowing them to own retail premises to sell cannabis products like: flowers, edibles, concentrates, cbd pills, etc. However, there are strict requirements that cannabis business owners and distributors should meet to qualify.

Benefits of LA’s Social Equity Program

The launch of the Social Equity Program comes with many benefits to those who qualify. The City is set to issue about 300 cannabis retail licenses to social equity beneficiaries. Here is what you may enjoy if you are eligible:

•Priority processing

•Verification of your qualification without site verification

•Training through an incubator

•Help with your licensing, and business compliance 

•Fee waiver

•Access to funds

What Are the Qualifications for LA’s Social Equity Program?

Based on the factors influencing the groups of people most affected by the previous cannabis laws, the city of LA has come up with three requirements. 

Here are the requirements that can qualify you for the social equity program. 

Tier 1: Low income and prior California Arrest or Conviction

According to LAMC Sec. 104.20, any income that is 80% or below the City’s Area Median Income qualifies as low income. For the years 2017 and 2018, that is approximately less than $45,644 in gross or total income. To prove low income status, you need to provide a federal tax return from 2017 or 2018 reflecting low income or proof of eligibility for General Assistance, Food Stamps, Medical/CALWORKs or Supplemental Security Income or Social Security Disability (SSI/SSDI). 

  • The second part of this requirement means that those who qualify need to have involved themselves in the cultivation, manufacture, use, possession, and sale of marijuana, leading to arrest or convection before November 8, 2016.

OR

Low Income and cumulatively lived for at least 5 years in a Disproportionately Impacted Area

These zip codes are for areas that qualify: 90003, 90062, 90057, 90037, 90001, 90061, 90008, 90059, 90011, 90016, 90002, 90021, 90014, 90044, 90021, 90037, 90043, 90058, 90033, 90027.

Tier 2: To qualify for the program, you need to own more than a 33.33% equity share of the business that will benefit if you get the license. And the proof of:

  • Low Income with not less than 5 years of cumulative residence in qualifying area: 

OR

  • Not less than 10 years of cumulative residency in a qualifying area.

Tier 3:

A Tier 3 candidate has to sign a Social Equity Agreement with the City of LA to provide property, capital, licensing and compliance support for a duration of 3 years to individuals who qualify for Tier 1, and business, licensing and compliance support to for a period of 3 years to individuals who meet Tier 2 requirements.

Tier 3 applicants have to give Tier 1 candidates access to the property without rent charges and with prorated utilities for not less than 3 years in a plan in line with LAMC Sec. 104.20(e)

Related Post: Cannabis Regulations in California and Elsewhere! (Overview)

Conclusion

The new era of legal cannabis in California comes with lots of benefits. The new policies will open amazing business opportunities and create employment for many people. However, many cannabis users are still yet to enjoy the benefits resulting from cannabis legalization equally. This includes people from marginalized and low-income communities still fighting the repercussions of the War on Drugs. 

To bridge the gap and empower equal opportunities, the city of LA created the Social Equity Program. This program offers support and assistance to people affected by the harsh cannabis laws previously.

Disclaimer

The materials made available in this blog were are for informational purposes only and not for the purpose of providing legal advice. You should contact your cannabis attorney to obtain advice with respect to any particular issue or problem.

This article was written as a guest post/collaboration with Cannabis2Biz.

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Connecting Cannabis: Craig and Marc Wasserman (Pot Brothers at Law)

Posted on by Antonio Javiniar
On this episode of Connecting Cannabis, Craig and Marc Wasserman, Founders of Pot Brothers at Law, join Hilart “Art” Abrahamian (COO, WebJoint) for a conversation on the nation’s cannabis vaping epidemic, going viral with their “Shut the Fuck Up” campaign, and licensing/regulations in California’s market. The Pot Brothers at Law seemingly blew up overnight with over 400 million views.  You can view the entire interview here!

Connecting Cannabis – Pot Brothers at Law – Chapter Guide:

Viral Success – 1:25
Law Background – 2:28
Transitioning into Cannabis – 03:23
Trademarking STFU – 08:20
Going Viral – 11:20
Typical Clients – 14:57
Do regulations kill small business? – 16:04
Evolution of Retail – 19:17
Instagram Speed Round – 20:53
When a Delivery Driver Gets pulled over – 33:38
The Illicit Market – 37:40
Consumers Against Unlicensed Retailers – 39:41
Licensing Fees – 40:19
280E & Taxes – 41:35
The Vaping Epidemic – 44:08
Fighting Against the Illicit Market – 47:21
Cannabis in Orange County – 48:44
Social Equity – 51:09
Process of Applying as a Social Equity Candidate – 52:42
Improving the Social Equity Program – 53:43
Improving Cannabis Policy – 55:14
The Famous Script – 57:33

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Subscribers to WebJoint‘s newsletter receive exclusive access to original content as well as automatic entry into raffles for event tickets, swag, and product giveaways.

 

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Connecting Cannabis: Aaron Riley (Cannasafe Testing Lab) (Full Interview)

Posted on by Alvaro Wong
Aaron Riley, Founder of Cannasafe, joins Hilart “Art” Abrahamian (COO, WebJoint) for a conversation on testing products in California. Cannasafe is one of the largest labs in the state have established themselves as one of the most trusted testing facilities carrying an ISO certification. Aaron answers questions regarding failed products that reach the market (and who’s liable), how your neighbors can be responsible for failed testing, and of course, compliance. You can view the entire interview here!
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As of June 30th, brands’ cannabis products will most likely be non-compliant

Posted on by Alvaro Wong

Yes, you read that right. As of June 30, 2019 many brands’ products will be non-compliant due to the updated package regulations by California’s BCC. The California Department of Public Health has mandated that “any inhalable cannabis product” should be marked with the universal symbol. This means that hardware, like vapes and vape cartridges, will now need to be labeled with the universal symbol if they want to remain compliant and continue to be sold in retailers. Previously, only the packaging itself needed to be labeled.

This is the timeline of execution for the new product requirements:

  • •Cannabis and cannabis product packaging that was compliant under the emergency regulations but is no longer compliant under the permanent regulations can be transferred to a licensed distributor until June 30, 2019.
  • •Licensed retailers may sell these cannabis products through December 31, 2019.

If you’re a retailer, you still have a little more time to get rid of the products, but are expected to destroy the items after December 31, 2019.

 

 

Now the question is why? The BCC hasn’t justified this new regulation ultimately leaving brands in the air. The Bureau is now expecting brands and manufacturers  to re-invest significant amounts into re-labeling products that were compliant a few weeks ago. Ultimately, this hurts the players who are trying to operate correctly and props up those who don’t abide by (or have the resources to abide by) the constantly-evolving arbitrary regulations.

We at WebJoint feel your pain, this is reminiscent of last year’s switch from whole weight to pre-packaged items – it put brands and retailers in a difficult position, costing them time and money to stay compliant with regulations. So, we compiled all the assets from the BCC that outline the expectations for compliant product packaging and labeling. 

We also did some graphic design work for the universal symbol, as the BCC only provides a JPEG of the logo. *sigh*

 

 

Although, this guide is in respect to branding your cannabis delivery, we can still apply those concepts to the packaging.

Disclaimer

The materials made available in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact your cannabis attorney to obtain advice with respect to any particular issue or problem.

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METRC and Your License: When should you be reporting?

Posted on by Alvaro Wong

When should you be reporting to METRC?

The licensing structure for the California cannabis industry is complex and confusing. Mix in the tech infrastructure of METRC and you’re thrown deeper into confusion. 

If you’re a cannabis delivery service and have struggled with the ambiguity of the BCC, you’re not alone. Many cannabis deliveries are fighting to stay licensed—and operating in confusion is anything but helpful. There is a large grey area and due to a lack of information being available to non-applicants, we can only help with the resources made available to us.

METRC can be very confusing if you've never used it before.

 

 

 

 

 

NOTE: All credentialed CCTT–METRC system users have access to the “California Transition Period Guide,” which outlines how annual and provisional licensees will process and report transfers to and from temporary licensees. (CDFA x BCC FAQ)

However, we wanted to share what we do know in order to better service our delivery clients in this time of transition to compliance.

Temporary Licenses and METRC

Most cannabis deliveries are currently operating under this license type. The State stopped granting these licenses as of December 31, 2018. Many businesses are now in a state of limbo awaiting their annual license while unable to operate because the temporary license has expired.

Retailers operating under temporary licenses are not required to report data to METRC, but are expected to do so after transitioning to a provisional or annual license.

 

Provisional Licenses and METRC

The provisional license was granted to those operators who had submitted annual applications to the BCC, but due to administrative delays on the State’s end, were not able to get processed before the expiration of the temporary license.

Under the provisional license, retailers are expected to report to the state’s track-and-trace system, METRC. If you have a provisional license, it also means you have applied for the annual license, hence you are eligible to receive training on METRC.

five common compliance violations for cannabis deliveries

Annual Licenses and METRC

METRC is transitioning to full scale in California. The cutoff to apply for temporary licenses was December 31, 2018 according to the BCC Order of Adoption. Any applicants post-date will have to apply directly for this type of license. The annual license is the ultimate goal for all cannabis deliveries. If you are a new applicant, meaning you have not received a temporary license, you are required to receive the “Account Manager System Training” program for METRC. This is mandatory. The training will allow for the individual to order tags, record inventory, and train other staff members on using the compliance system. Keep in mind you need an application number to register for this training.

You will have 30 days after receiving your annual license to complete the training and source a METRC-validated software (i.e. WebJoint) to run your business on. Because staying compliant is a crucial component of your delivery’s success, we recommend having a dedicated compliance officer or inventory manager who has extensive knowledge on compliance. The application process is expensive and tedious enough—risking your license due to an administrative hiccup is the last thing you need.

How WebJoint Helps

WebJoint is a METRC-validated software.  We have made our software around all the compliance points METRC looks for. Data on driver location, inventory management, sales, etc. are relayed to METRC in real-time. Our software eliminates the need for cannabis deliveries to “double input” data into their management software and METRC. Operate your cannabis delivery efficiently and compliantly with WebJoint.

Author’s Note

Though cannabis retailers are expected to report to METRC during their provisional license period, there has been a grey are in terms of enforcement, hence the “30 day rule” mentioned above is put in place to make the annual license reception the hard cut-off point for not reporting to METRC. Please keep in mind that the BCC does have the power to audit any retailer at will. Seek legal counsel from an attorney for any further questions.

Disclaimer

The materials made available in this blog are for informational purposes only and not for the purpose of providing legal advice. You should contact your cannabis attorney to obtain advice with respect to any particular issues or problems.

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