While we firmly believe the banking issue will be resolved in the near future, some are pushing forward with alternative solutions. The following article was of interest to HighBridge for several reasons:
- Alternative Banking (of course)
- Growing acceptance of Credit Card Use
- Huge Increases in Average Purchase For Direct to Home Delivery
The latter is of particular interest as HighBridge, in conjunction with it strategic partners, explores the possibility of Intra-State (eventually Inter-State) “Direct to Consumer” internet marketing.
From June 27 Newsletter, National Institute of Cannabis Investors:
One Bold Step to Fix the Cannabis Banking Conundrum
This company is taking the cannabis banking issue into its own hands…
You know how the story ends.
Eventually, cannabis will be legal in the United States, and marijuana entrepreneurs will be able to walk into a bank and open an account just like any other businessperson. When all is said and done, a lot of your grandchildren will only know a world where cannabis was always legal. That’s why the normalization of cannabis is such an important topic. There are a lot of ups and downs, so remember to be patient.
Investors who can hang in during the low points are the ones who reap the biggest rewards. And during this journey towards full U.S. legalization, one of the biggest issues has been solving the banking problem. As you know, cannabis CEOs can’t exactly walk into a bank and borrow money or even ask to deposit their cash hoard. The cannabis industry has been looking for workarounds to access capital, and one of those is the launch of crypto cannabis coins, but those are frankly worthless. However, one company isn’t sitting around and waiting for the end of federal cannabis prohibition. In fact, by the end of the year, if you buy cannabis in New York, Delaware, Pennsylvania, Illinois, or Arizona, you could use a credit card to pay for it…
Credit Cards Give Cannabis a Boost
Columbia Care Inc. (OTC: COLXF) recently announced that it was launching a credit card for cannabis purchases for its retail locations, which appears to be the first of its kind.
This site explains more about the card and lets people apply for the Colombia National Care (CNC) credit card. “By launching the first credit card in the country that can be used by consumers and industry participants to purchase cannabis products, we now exclusively offer an important capability that will serve Columbia Care’s national growth initiatives, including home delivery, automatic fulfillment, and e-commerce,” Columbia Care CEO Nicholas Vita said in a statement. When the credit card was used, Columbia Care experienced an 18% increase in average basket size for instore purchases.
The company also said that home delivery in New York has become its fastest growing segment of the credit card program. Home delivery currently accounts for over 10% of Columbia Care’s revenue in the state, with an average basket size that is 40% greater than in-store purchases. Right now, the credit card only works at Columbia Care locations, but the company is reportedly looking at targeted partnerships so the CNC program will work at other
businesses. Columbia Care currently accepts the credit card at its locations in New York, Delaware, and Pennsylvania, and cannabis enthusiasts will soon be able to use the card in
Illinois and Arizona.
We’re curious about what company is acting as the intermediary to allow these transactions to take place. That would let us know more about scalability. Of course, down the road, cannabis enthusiasts will be able to use their Visa card to buy marijuana, so this isn’t a longterm solution to solve the banking issue in cannabis. It’s this type of problem solving and entrepreneurship that the cannabis industry needs.
The Bigger Picture Cannabis investing is unique because there’s never been an industry quite like it. In terms of a social impact, it’s like the end of the prohibition on alcohol. For investing, one of the closest things I’ve seen is the tech boom, but again, that’s not a perfect comparison. I know with stock prices dropping, it’s easy to get impatient and forgot about the bigger picture. Just remember that everything takes time.
One of the concrete changes we’ve seen already is the growing acceptance of CBD. That’s because the best CBD businesses have treated it as a wellness product, which is why CBD is now in stores like CVS, Rite Aid, and Walgreens.
Athletes like former NFL great Calvin Johnson and TV personalities like Martha Stewart are also getting involved in the business. That will bring more positive attention to the
space and helps to remove some stigma. Finally, we’re getting even closer to mutual funds and
retirement funds investing in cannabis stocks. That will bring stability to the market. With more money behind cannabis firms, it will take a lot more than a few investors panic-selling their stocks to drive down prices. So if you ever feel discouraged, just realize we are still in the very early stages of what is happening with the legal cannabis market. Early investors in Amazon had their doubts, but look at where that stock price is today.