The bitcoin solution to cannabis payments
The battle to legalize marijuana for medical or recreational usage has been long, but it is finally bearing fruit. Marijuana is legal for recreational use in Oregon, Washington, Alaska, Colorado and the District of Columbia. However, banks today refuse to deal with marijuana, thus none of the legal marijuana businesses can accept debit or credit cards. Thus, this cash only industry can be a big security liability for businesses. However, some businesses are offering kiosk solutions to this payments problem. Some are developing a secure cash solution, whereas others are dealing with bitcoin payments.
In particular, Jane has developed a payment kiosk, which acts as an all-in-one solution for marijuana retailers, according to David Ellerstein, CEO of Jane. The company was originally a creator of payment kiosks to enable remittances. However, in 2014, co-founder Jeff Foster realized there was an opportunity to provide a cash management tool for the cannabis industry.
The kiosk is designed to store all cash in an integrated safe, which is not handled by any employees. The cash is picked up by an armored car, manned by trained security professionals, according to a Jane press release.
The kiosk can accommodate customers in three different ways. First of all, customers can order on the Jane app. The customer will receive a QR code, which they can use at the kiosk. "The kiosk has a scanner that will read the QR code, and then you will make your payment," Ellerstein said. "It will update the POS which is integrated. Our POS integration makes everything run smoothly."
Second, customers can simply go to the store and pick up a receipt from the counter. They can scan that receipt into the kiosk and then perform the entire transactions through the kiosk, including payment, then the retailer will prepare the order and give it to the customer. The third method is to simply perform the entire order at the kiosk and then got to a waiting room area called Jane Express and wait for the order to be prepared.
Other companies have looked for other solutions to the payments problem with marijuana. For example, American Green Inc. uses ZaZZ vending kiosks, which can dispense marijuana for bitcoin payments. Because bitcoin is a decentralized solution, it is not tied to a particular bank. Other companies use voucher programs, according to Ellerstein. Essentially, customers purchase a voucher and then use the voucher to pay for the cannabis.
The great benefit of these kiosks is to give legitimacy to this growing cannabis industry, where in 2014, the state of Colorado collected more tax revenue on marijuana than on alcohol. By showing that this is a legitimate safe industry, it can draw bank support. "This is way to show bankers or regulators that you are a sophisticated retailer and you are being unfairly discriminated against," Ellerstein said.
Jane has already designed its kiosks to be EMV ready for when financial institutions enable credit and debit card payments for marijuana. It is possible that most financial institutions will wait for national legalization before enabling payments.
However, in the meantime, bitcoin can offer a workaround by providing a secure alternative that protects user privacy. It can act as a back up for customers who haven't visited the ATM in a while. Considering that bitcoins are used regularly for illegal drug deals, it would make sense for the virtual currency to be used for legal marijuana sales.
Bradley Cooper is a Technology Editor for DigitalSignageToday.com. His background is in information technology, advertising, and writing.www