Mastercard at the end of last month decided Stop debit card transactions with cannabis dispensaries and notify financial institutions and payment processors to stop processing purchases.It’s not the first digital payment solution to quickly exit the industry — the vendor shut down the service late last year. service for cashless ATMs. These sudden decisions made headlines and shocked dispensary owners, operators and consumers as they scrambled to refocus their attention on the remaining legal payment tools.
For a cannabis industry veteran like myself, these withdrawals come as no surprise. why? Cannabis is illegal under federal law, and even though it is legal at the state level, federal regulations restrict banks and other financial services companies from doing business with cannabis businesses. This major legal hurdle makes it difficult for cannabis dispensaries to manage and facilitate payments, as they often lack access to regular banking services and have limited payment options for consumers.
Several believe The decision by Mastercard, the world’s second-largest payment provider, and other payment vendors, coupled with political pressure to legalize cannabis, has led to legalization and Safe and Fair Enforcement (SAFE) policies to alleviate cannabis shortages. ) could help advance banking legislation. Banking services will be available in the long run. Cannabis presents economic opportunities, MJ Biz Daily Estimate Combined medical and adult cannabis sales could reach $33.6 billion by the end of 2023 and $53.5 billion by 2027. There are hurdles to legalization, so cash will be the most popular payment method at this point.
let’s talk about cash
Cash remains the most prevalent payment option for cannabis for many years. But it poses challenges for businesses. Physical cash management is difficult for pharmacies for several reasons. The main reason is the cost of counting, tracking and managing the amount of cash and the effort required to count cash. In fact, in most pharmacies, employees count cash on average 6 times a day. Every time cash is counted manually, pharmacies run the risk of miscounting, shrinking inventory, and security and safety concerns from robbery.
This manual labor required to monitor a company’s balance sheet and keep pharmacies running is inefficient and unsustainable. Many companies are trying to implement However, while cash presents logistical and operational challenges for pharmacy owners, it remains one of the more reliable payment options that consumers and pharmacies have for cannabis transactions. Pharmacies can integrate simple strategies to improve cash handling and operate more efficiently.
Pharmacy cash management best practices
The biggest and most impactful strategy is to incorporate cash automation tools that help secure, count and manage payments. Washington, DC’s largest and oldest pharmacy has built highly automated tools into its cash-handling operations, allowing clerks, managers, and cashiers who previously relied on manual cash handling to count, sort, and manage cash. A big headache and burden for the team has been relieved. .
This cash processing technology improves counting accuracy, saves staff time, improves visibility and enables real-time reporting. These tools have transformed the staff’s daily work. Pharmacy accounting teams and their employees are armed with tools to eliminate the extreme costs of handling cash, so predicting cash flow increases on April 20 and other holidays can be overwhelming no longer. In addition, complete reporting of each transaction by user, by date and time gives you confidence to support audits. Before automation, it was almost impossible to perform audits with confidence.
The biggest advantage of cash automation tools is that they virtually eliminate shrink, a term used to describe the loss of cash due to employee theft or miscounting. Cash automation will make cash as affordable as digital payment options, giving consumers even more confidence that cash will not disappear as a payment option.
make a cash strategy
Mastercard’s decision to exit the cannabis industry puts pharmacies on edge, while the cannabis payment ecosystem continues to evolve and move rapidly. Pharmacies must be agile and incorporate strategies for reliable payment options both inbound from consumers and outbound to vendors.
As the cannabis industry continues to evolve, implementing cash automation will be essential for sustained growth and success. Cash automation is Cannabis’ innovative solution that reduces cash management costs while addressing the unique challenges associated with large cash operations. By embracing cash automation, pharmacies can thrive in an evolving industry while maintaining control of the cash ecosystem, regardless of who enters or leaves the payments space.