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Onfleet partners with Dama Financial and Paytender to enable seamless payments in cannabis delivery

Cannabis industry faces hurdles, especially with financial transactions

The cannabis industry has overcome many hurdles as it has matured. Aside from vast differences in state-by-state regulations, the restrictions on financial services are among the most challenging. Whether it is a customer who wishes to pay for purchases, a cannabis business needing access to basic banking for day-to-day operations, or a cannabis business negotiating capital investments at exorbitant rates, roadblocks have defined this business journey.

The Challenge Of Building Credit In The Cannabis Industry

Businesses need funding to grow. Securing funding isn’t as easy as a walk down to the local bank, however. To receive a loan or a line of credit, a business must demonstrate a financial history record that portrays how trustworthy it is with money. No one is going to lend to a stranger. So, how do you demonstrate good credit? In particular, how does a cannabis business demonstrate credit when credit companies shun the industry?

The Future Of The Cannabis Industry After The Pandemic

Covid-19 presented an economic crisis that is testing the resilience of the retail industry. Some retailers are suffering great loss, and others are adapting through innovation. Consumer shopping behavior and preferences have changed. To minimize the risk of contracting the virus, many shoppers have actively avoided contact to remain safe while contributing to the economy. With that in mind, they have largely resorted to e-commerce and contactless purchasing methods.

The Challenges Of Running A Legitimate Cannabis Business Out Of A Duffel Bag Filled With Cash

Those unfamiliar with the cannabis industry assume that a cannabis-related business (CRB) operates much the same as any other business. For example, people assume that the CRB has a bank account and can write checks, and send payments via ACH and accept credit cards. However, such assumptions could not be further from the truth.

The Importance Of Compliant Cannabis Banking

Thirty-three states and the District of Columbia have legalized the sale or use of cannabis. Yet, the federal government is struggling to keep up, and cannabis legislation has been stagnant. As a result, there is no safe harbor in the cannabis industry, meaning there is no legislation that assures the safety of banking cannabis. So, many who enter the cannabis industry have preferred stealthier ways of banking.

The Cost Of Cash For Unbanked Cannabis Businesses

Cannabis is legal in a majority of states but remains illegal at the federal level. This legislative divide creates uncertainties that dissuade most federally regulated banks from servicing the cannabis industry. With banking providers in short supply, cannabis businesses are struggling to earn and maintain the same access to financial services as their peers in traditional retail industries.

Cannabis Cos. In LA Get Option For Online Tax Payments

Cannabis businesses in Los Angeles that are used to paying their city taxes in cash can now pay through online accounts, through a banking agent working with the city to help the underbanked industry during the COVID-19 lockdowns.

Dama Financial's exclusive agreement with the city to service the more than 300 cannabis business licensees involves an armored vehicle picking up cash from the business, then depositing it in a federally insured "virtual vault," where the business accesses it to pay city cannabis tax and licensing fees, according to the company.