06 December 2022 |

Is this the end of cashless cannabis?

By Kaitlin Domangue

Cashless cannabis ATM crackdown 

The cannabis industry is full of workarounds, and honestly, who can blame us?

But some workarounds aren’t without consequences. That’s exactly what’s happening with cashless ATMs. 

Some of the largest processors of ATM transactions, like NCR’s Columbus Data Services, have shut down certain services’ abilities – leaving some dispensaries unable to process cashless payments. 

Cannabis finance executives say “the writing has been on the wall” about cashless shutdown 

Here’s what VP of Marketing at cannabis banking solutions Green Check Verified, Brett Puffenbarger, said on LinkedIn about the issue: 

“Cashless ATMs were a workaround for #cannabis companies to accept debit card purchases.

If you’ve ever bought weed with a card and been charged a few dollars more than the actual cost and had the difference handed back in cash that’s probably what happened.

Basically, the system rings up a purchase as an ATM withdrawal. Sometimes using different addresses or business names (you know… to be extra super careful it doesn’t look like a weed purchase)

It has always been a grey area. Even if/when providers said it wasn’t…. This was the “back end” provider for payment solutions like Paybotic, Jory Paymens, and SaltMoney.”

Green Check Verified’s Peter Su also said, “the writing has been on the wall for a while now” regarding these cashless payment systems. 

NCR declined to comment to the Seattle Times on the shutdown, but more information will likely emerge in the coming days. 

First major executive shake-up hits Dutchie

It’s the executive shake-up heard ‘round the cannabis industry. 

Cannabis retail tech brand, Dutchie, announced a dramatic change to their executive team on December 1st. 

Dutchie’s co-founders and brothers, Ross and Zach Lipson, stepped down from their executive roles at the company “after a long tenure of driving growth, passion, and innovation in the cannabis industry,” reads the press release. 

The press release didn’t explain why the Lipson brothers stepped down, and during their time at Dutchie, they weren’t quiet about their love for the company and what they built. 

Many people considered them the heart of Dutchie. 

The Company’s Board of Directors appointed Tim Barash as Dutchie’s new Chairman and Chief Executive Officer. 

Tim previously served as the Chief Business Officer and Chief Financial Officer for Toast, a restaurant management software company. 

“Tim has the experience, and leadership velocity Dutchie needs to deliver extraordinary value to our customers,” said Dutchie Board Member, an early investor, and Managing Partner at Gron Ventures Wilder Ramsey in the press release. 

“He has brought on a remarkable, public-ready management team from Toast, Hubspot and PayPal – companies that pioneered essential technology in underserved industries. They join a team that is already delivering sequential quarters of record growth.”

Dutchie’s lofty valuation may have contributed to the Lipson brothers’ departure

Though we don’t have a concrete explanation for their departure, we do have some clues. 

Dutchie announced a USD $3.75 billion valuation in October 2021 alongside a $350 million Series D round. 

While Dutchie was held on a pedestal by many people in the industry for its company culture and rapid market penetration, a $3+ billion valuation was shocking. 

And Dutchie had to live up to it. With the Lipson brothers at the helm. 

Dutchie’s five fundraising rounds took place during a really sweet spot in the North American cannabis market, beginning with their $3 million seed round in April 2018. 

2018 was a huge year for cannabis fundraising, with approximately $8 billion raised over the calendar year. It was more than triple the amount of cannabis funding raised in 2018. 

In other words: optimism was in full force. For the cannabis industry and investors alike. 

This undoubtedly contributed to Dutchie’s fundraising rounds and, subsequently, the $3+ billion valuation in October 2021. 

The choice to bring Tim Barash (and the new CFO, who also comes from Toast) on board is not without careful calculation. The Board of Directors said it themselves in the press release.

“Tim has the experience and leadership velocity Dutchie needs to deliver extraordinary value to our customers.”

Dutchie’s Board of Directors likely feels the Lipson brothers weren’t equipped to see the company through its new growth phase. 

This move also sparks curiosity about Dutchie’s layoff in June and whether the Lipson brothers’ direction contributed to that.

If nothing else, the executive shake-up is just another reminder that investors have the final say. Especially in cannabis. 

President Biden signs historic cannabis research bill

The first piece of cannabis-specific federal legislation was signed into law by President Joe Biden on Friday, December 2nd.

Y’all. It’s been a struggle. It’s unfathomable that this is the first piece of cannabis-specific federal legislation to ever reach the President’s desk, and fortunately, it was signed.

It’s not the MORE Act, it’s not SAFE Banking. Cannabis is still a federally-controlled substance. 

Monumental steps for cannabis research 

But this legislation paves a way for researchers to study the medical benefits of cannabis. 

This research could also determine key decisions in reviewing cannabis as a scheduled substance, which President Joe Biden also initiated in October. It also gives doctors federal permission to discuss cannabis with their patients without being penalized. 

The federal Department of Health and Human Services (DHSS) now has the authority to research the therapeutic benefits of cannabis, in fact, the bill requires the research to be conducted. 

“Research is foundational for the path forward on cannabis policy,” said federal lawmakers.  

“We celebrate the enactment of this critical and long-overdue legislation, and we know there is much more to do to remedy the ongoing harms of the failed war on drugs.”