You Can Now Buy Weed In Oregon Without Cash — Legitimately

Cashless cannabis commerce is going legit in Oregon.

CanPay, already operating in several cannabis-legal states, including neighboring Washington, began installing its app-based payment service at Oregon retail shops this week, linking up with Maps Credit Union in Salem, the go-to financial institution for cannabis businesses in the state.

“There are all kinds of backdoor ways that people try to do this, but this is the first one we came across that our bank recommended,” said Olin Wood, an owner at Local Leaf in Southwest Portland.

Wood said Local Leaf will wait until “after the Fourth of July weekend craziness” to make CanPay available to its customers.

Once the system is live, the shop will pay a fee of between 1 and 2 percent on each CanPay transaction, which Wood figures is well worth it: Electronic payment is convenient for the business and customers, he said, and might induce some shoppers to spend a little more freely.

That’s the way the wider world of retail works, of course, but federal marijuana prohibitions have made cannabis an almost entirely cash-based industry.

The Departments of Justice and Treasury have laid out rules that give financial institutions a narrow path to work with cannabis businesses. But the complexity of compliance and questions about how firmly those rules might hold have kept all but a scattering of institutions out of the game. Credit card giants MasterCard and Visa have also steered well clear of cannabis.

That’s provided an opening for Littleton, Colo.-based CanPay.

The company’s service works through an app that links to the customer’s checking account. At the counter, the customer calls up the app, which generates a single-use payment paycode that expires within 30 minutes. The customer scans the code into the retailer, setting in motion a money transfer through CanPay’s partner institution.

“We use the ACH Network, and there is no prohibition on cannabis transactions in that system,” Dustin Eide, CEO of CanPay, said. The necessary component in making it work is a financial institution at the retailer’s end, and that’s where Maps comes in.

The credit union didn’t respond to questions, but Wood, at Local Leaf, said Maps sent out a letter recently notifying cannabis clients of the CanPay service.

Wood said Local Leaf had used an electronic-payment service before, but after a few months a new terms of service came with a prohibition on cannabis businesses. Some businesses try to obfuscate the cannabis connection, but Eide said CanPay is the only fully transparent and compliant system available.

In addition to Local Leaf, three Electric Lettuce and three Serra shops — all six are under the Groundworks Industries umbrella — have signed onto CanPay so far in Oregon.


Link – Biz Journal

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