The cannabis industry is experiencing tremendous growth, generating over $13 billion in revenues in 2019. That’s almost a 32% increase from the previous year. However, despite tremendous revenue gains and a rise in legislation for wider legalization, traditional lending channels are reticent to provide adequate financing to dispensaries, growers, and other businesses in the cannabis industry. Additionally, merchant processing fees for cannabis businesses are much higher than in other sectors.
Challenges in Financing Cannabis Businesses
One of the major obstacles facing cannabis businesses is the lack of federal legalization. While individual states can make decisions to legalize cannabis within their borders, it is still illegal on a federal level. Traditional lenders, such as banks, are federally regulated, so securing financing of any nature through those channels is practically impossible, because banks adhere to federal regulations. Similarly, since state laws vary widely regarding the use, legalization, and commerce within the cannabis industry, financing even from private funding firms can become extremely complicated, especially if those lenders are located in places where there is no statewide legalization. Even when processing credit card transactions, the fees and contract maintenance charges can eat into revenue and place a strain on cash flow for cannabis businesses. In short, cannabis businesses throughout the United States need solutions that are not prohibitive, and which can enable further growth.
Legal Solutions for Legal Cannabis Businesses
While securing loans through traditional channels are off the table for the time being, cannabis businesses can lower their credit card processing fees. Topnotch Payment Solutions offers merchant processing services to cannabis businesses throughout the United States. Unlike other credit card processing programs, we do not have monthly or annual fees. We utilize the latest cash discounting software and offer free equipment options to cannabis businesses. Not only do we enable dispensaries and other cannabis businesses to save thousands by lowering the costs of processing fees, but we also go further by allowing cannabis businesses to reap the same profit margins from credit card transactions as they do from cash sales. We adjust credit card offset costs in real-time to help automate sales and accounting for the cannabis industry.
Contact Topnotch Payment Solutions today to learn more about our merchant solutions for cannabis businesses.