Cashless Payments in Maryland
Medical dispensaries in Maryland are using a cashless payment system in hopes that it will lead to safe and convenient transactions.
A mobile app called CanPay, designed to allow debit payments in the cannabis industry, launched in November 2016 and has expanded to dispensaries in eight states so far, most recently Maryland.
Maryland legalized medical marijuana four years ago, but dispensaries just now have begun to open. 20 licenses have been issued so far, and the state estimates it will eventually have over 100 dispensaries. 5 have opened, with limited supplies.
Data from the state’s Medical Marijuana Commission shows that over 17,000 consumers in the state have registered for medical marijuana.
Under federal banking and financial rules, credit and debit cards can’t be used for medical marijuana purchases, so the industry has operated on a mostly cash basis. Federal guidelines issued in 2014, however, have allowed financial institutions to take steps to qualify to offer services in states that have legalized medical use.
Dustin Eide, CEO of CanPay, says the service has expanded as it has been able to partner with banks that comply with the 2014 guidelines. It’s free for consumers, while dispensaries pay 2% of transactions. Eide believes the company’s service eventually will become the standard in most dispensaries as both patients and dispensaries seek safer, more convenient alternatives to cash.
“There’s a reason people don’t generally carry a lot of cash on them,” Eide said. “It’s important for the industry to have a more normalized and cashless payment method.”
CanPay works through a website and mobile app that customers download. When a customer uses the app to make a purchase, funds are transferred to the dispensary from a checking account, a single-use payment personal identification number.
Greenhouse Wellness will be offering CanPay as a payment option, but they are waiting to have an adequate supply of products from growers before opening. Kait LeDonne, chief marketing officer, said the business considered more than 40 vendors before selecting CanPay.
“We find many of our patients want a cash-free option,” LeDonne said. “It’s something they use in other purchases, and we want to offer them the same convenience in the dispensary.