{"id":29045,"date":"2023-04-12T21:47:30","date_gmt":"2023-04-12T21:47:30","guid":{"rendered":"https:\/\/scienceandnerds.com\/2023\/04\/12\/updated-smoakland-is-testing-a-loophole-to-sell-cannabis-by-credit-card\/"},"modified":"2023-04-12T21:47:30","modified_gmt":"2023-04-12T21:47:30","slug":"updated-smoakland-is-testing-a-loophole-to-sell-cannabis-by-credit-card","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2023\/04\/12\/updated-smoakland-is-testing-a-loophole-to-sell-cannabis-by-credit-card\/","title":{"rendered":"UPDATED: Smoakland is testing a loophole to sell cannabis by credit card"},"content":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/03\/30\/smoakland-credit-cards\/<\/a><\/br>
\nUPDATED: Smoakland is testing a loophole to sell cannabis by credit card<\/br>
\n2023-04-12 21:47:30<\/br><\/p>\n

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What do you do when you have a very successful and popular product (marijuana) that is legal in some places, but federally has been a Schedule 1 drug<\/a> since 1970? Well, you can\u2019t rely on any national institutions as your business partners. One of the major places that shows up is in payments and payment processing; even after recreational cannabis became legal in 21 states and decriminalized in another dozen or so<\/a>, cannabis has become largely a cash business. In a world that is increasingly cashless, that\u2019s a problem for both consumers and businesses. Smoakland<\/a> is currently beta-testing a loophole that lets its customers pay by credit card. The secret, it turns out, is crypto.<\/p>\n

\u201cYou\u2019re not actually purchasing cannabis with a credit card,\u201d says Jeff Dillon, managing director of Marketing at Smoakland. \u201cYou\u2019re purchasing crypto, and then we immediately use the crypto to purchase cannabis, before cashing the crypto back out. That way, your credit card company knows users are purchasing crypto. Crypto doesn\u2019t give a shit what you do with it. For my purpose, and for the purpose of the customer, [the payment processor has] no idea what\u2019s going on.\u201d<\/p>\n

Of course, cannabis is a higher-risk market, and Smoakland expects it needs customers to pay a bit more in processing costs, but the team believes the customers are willing to do that in order to go up in a blaze of convenient glory.<\/p>\n

\u201cTwo to three percent is standard for e-commerce, if you open a Shopify account or something like that. We are probably around 5% with high risk. If we were to open a porn site, it could be even higher than that. We\u2019re a little bit lower, because there\u2019s still a physical transaction. Anything involving crypto is deemed high risk, and you\u2019re going to be charged a higher rate for the risk,\u201d Dillon explains.<\/p>\n

The Smoakland team says it is at the bleeding edge here, and wants to keep its cards close to its chest regarding who the exact payment processor is.<\/p>\n

The company says it is noticing fluctuations of average order size throughout the month, and is hoping that offering credit cards can help smooth out its peaks and troughs a little \u2014 but also to make its products available to customers who need them. It is hoping to do a full-scale launch of its credit card service on the 20th of April \u2014 known as 4\/20, which, as a number, for various reasons, has become synonymous with marijuana<\/a>.<\/p>\n

\u201cWe\u2019re seeing this cash crunch, and a quasi-recession that we\u2019re going into. You can really see that between pay periods the difference in average order size varies. I\u2019m starting to kind of pick up on this trend: The first and 15th, people have a lot more money to spend, and the average order sizes are higher,\u201d Dilon explains. \u201cIt\u2019s in beta currently, and we hope to go after a full rollout for 4\/20 to capture that market. So that\u2019s a big push, trying to have credit cards available then, because it\u2019s an off-week. People get paid on the 15th. Being able to offer credit cards for people who are on a bit of a tight budget, that\u2019s even better.\u201d<\/p>\n

The Smoakland team is aware, of course, that the products are used recreationally, but it believes it is on a bigger mission, describing its product as an \u201cessential, critical medicine for people.\u201d Among other things, the company is pushing on prices.<\/p>\n

\u201cIn Oakland, you see our billboards and banners around,\u201d says Dillon, comparing his company with Fred Franzia\u2019s Two-Buck Chuck wine<\/a> selling out of Trader Joe\u2019s. \u201cFranzia went to Paris and realized there\u2019s great wine sold at normal prices. We do the same thing for cannabis, as the home of the $49 ounce.\u201d<\/p>\n

It\u2019ll be interesting to see whether Smoakland will be able to keep its payment processor up and running in the midst of a complicated set of pressures on the financial institutions, but the company isn\u2019t overly worried, and suggests that the SAFE banking act<\/a> is putting its thumb on the proverbial scales in the favor of what it is doing.<\/p>\n

UPDATE<\/strong>: It turns out that you can\u2019t use this approach, and Smoakland are cancelling the trial. Update here<\/a>.\u00a0<\/em><\/p>\n

\u00a0<\/p>\n<\/p><\/div>\n

<\/br><\/br><\/br><\/p>\n

Tech, Technology<\/br>
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\nSource:https:\/\/techcrunch.com\/2023\/03\/30\/smoakland-credit-cards\/<\/a><\/br><\/br><\/p>\n","protected":false},"excerpt":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/03\/30\/smoakland-credit-cards\/ UPDATED: Smoakland is testing a loophole to sell cannabis by credit card 2023-04-12 21:47:30 What do you do when you have a very successful and popular product (marijuana) that is legal in some places, but federally has been a Schedule 1 drug since 1970? Well, you can\u2019t rely on any national institutions as your […]<\/p>\n","protected":false},"author":1,"featured_media":29046,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[17,8],"tags":[],"class_list":["post-29045","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech","category-technology"],"yoast_head":"\nUPDATED: Smoakland is testing a loophole to sell cannabis by credit card - Science and Nerds<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scienceandnerds.com\/2023\/04\/12\/updated-smoakland-is-testing-a-loophole-to-sell-cannabis-by-credit-card\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UPDATED: Smoakland is testing a loophole to sell cannabis by credit card - Science and Nerds\" \/>\n<meta property=\"og:description\" content=\"Source:https:\/\/techcrunch.com\/2023\/03\/30\/smoakland-credit-cards\/ UPDATED: Smoakland is testing a loophole to sell cannabis by credit card 2023-04-12 21:47:30 What do you do when you have a very successful and popular product (marijuana) that is legal in some places, but federally has been a Schedule 1 drug since 1970? 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