CHICAGO–Marijuana company Columbia Care announced it plans to roll out a credit card that its customers will be able to use at its dispensaries. The card is being offered as an option to using cash, which dominates transactions in the retail cannabis business due to the lack of financial institutions willing to serve the businesses due to federal restrictions.
Columbia Care has been testing its credit card in New York and plans to roll it out this month in Illinois, CEO Nicholas Vita told the Chicago Tribune. The company reported patients spend an average of $144 per visit at the Chicago dispensary.
“We have an industry where people have to use their debit cards or ATMs or cash to make purchases. It’s like 1974,” Vita told the publication. “We’ve seen what happened when we introduced access to this capital, and it has a huge impact in giving patients access to the products they need and want.”
According to Columbia Care, patrons will fill out a form on a tablet in the dispensaries to get qualified, adding approval is expected to be fast enough that customers will be able to use their credit card to make a purchase on the same visit.
Working in 12 States
Columbia Care reported it is working with financial institutions and other intermediaries in each of the 12 states it operates in, plus Puerto Rico and Washington, D.C., but it declined to disclose the issuer(s) with which it is working. The cards will have no annual fee and an annual APR of 15.99%.
The company reported at its New York dispensaries it tested the credit card, customers bought 18% more per dispensary visit when paying with credit.
“In other words, being able to pay with a credit card seemed to free consumers to buy more products at one time. It also increased the number of repeat visits and automatic fulfillment orders,” said Bill Hardekopf, CEO of LowCards.com
Vita told the Chicago Tribune that if customers are able to use a credit card to buy marijuana just like they would any other product, they’ll get used to buy any other product.
In addition to New York, the card will soon be obtainable in Delaware and Pennsylvania. Later this month, the program will expand to Illinois and Arizona.
Looking for Alternatives
The Tribune added marijuana dispensaries have turned to a number of alternatives to cash. In some cases, dispensaries have allowed customers to purchase gift cards with their credit card and then use the gift card to purchase marijuana. In Hawaii, dispensaries started asking customers to download Colorado-based payment app CanPay in 2017. Customers used their checking accounts to pay through the app, which then transferred the money to the accounts dispensaries set up at a Partner Colorado Credit Union. A California-based company called Zodaka also is working to roll out its bank-to-bank payment platform to dispensaries, the Tribune said.