Medical cannabis company Columbia Care has launched its own credit card for patients in New York, with plans to offer the card next in Illinois, the Chicago Tribune reports. Company CEO Nicholas Vita said the service was necessary because the all-cash nature of the industry is “like 1974.”
“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,” he said in the report.
The company is working with financial institutions in the 12 states it operates to offer the card, which has no fees but a 15.99 percent annual percentage rate — the national average for credit cards in 17.73 percent.
During the card trials in New York, Columbia Care found that customers spent 18 percent more when using the credit card, Vita said, adding that it allows patients who have to travel long distances to a dispensary make less frequent visits. Vita indicated that having a credit card for cannabis purchases also helps normalize the industry.
The all-cash nature of the cannabis industry is nothing new. Cannabis is a Schedule I drug according to federal law, which prevents many financial institutions from serving the industry, including credit card processing services. Morgan Fox, the spokesperson for the National Cannabis Industry Association, called it an issue that has “plagued” the sector.
“Since people have been looking for viable alternatives, people have been trying to fill that gap in lieu of better federal policy.” — Fox, via the Tribune
There is a bill in Congress to allow canna-businesses to access financial services without fear of reprisal by federal law enforcement and regulators; however, Idaho Sen. Mike Crapo, the Republican who chairs the Senate Banking Committee, has indicated he may not allow the SAFE Banking Act a hearing in the chamber.
Some states with legal cannabis programs are working toward normalizing banking for the industry on a state level. West Virginia is currently seeking a bank to serve its medical cannabis industry while California’s Senate last month approved legislation to create state-chartered banks to work with both medical and recreational cannabis businesses.