Cannabis digital payments could provide an important alternative to the cash-heavy transactions that remain common across the U.S. cannabis industry. WayV, a Los Angeles-based startup offering a B2B cannabis logistics and compliance platform, is introducing payment capabilities designed to make transactions between licensed cannabis businesses easier and more efficient.
Federal restrictions have made it difficult for cannabis companies to access traditional banking and card payment services, creating operational challenges for retailers and suppliers. Digital payment platforms could help reduce dependence on cash while supporting the regulated cannabis market and improving convenience for businesses operating within it.
This is a first, but let’s stuff some thoughts into the pipe and smoke it, so to speak. This brief piece is in TheGrowthOp and discusses WayV, which is a 2017 L.A. startup with a B2B cannabis logistics and compliance platform that delivers inventory to cannabis retailers. The point of the piece is to discuss a B2B payments capability that provides an easy alternative to what are often cash exchanges.
The U.S. federal prohibition on cannabis, thanks to the Drug Enforcement Administration’s (DEA) classification of the drug as a Schedule I narcotic, means that cash is often the only way to pay at many U.S. pot shops, since credit card companies and financial institutions tend to steer clear of working with anything cannabis-related.
McCarty is the CEO of Wayv. The year-old company, based in Venice Beach, Calif., has created an Amazon-esque sales platform for state-licensed cannabis retailers in California to make online sales and schedule one-day deliveries. It has already stacked up millions on a monthly basis.
While we get that, there is no detail on what the payment instrument(s) is that is enabled by the platform.The site does not reveal this, so we’ll have to wait to read more detail at a separate time, or maybe chat with the founder, who also previously launched a site called Eaze, an earlier medical marijuana startup which appears to be a retail version of the marketplace.
A quick browse there and one can see many interesting things for sale, almost all of which these eyes have not before considered (no, really.) The founder has the right idea; let’s make money and move the market away from the bad guys.
The caveat? The company has yet to turn a profit, although it has plans to capitalize on the payment system by eventually charging transaction fees. For at least part of 2020, however, the fees will be waived to get consumers familiar and comfortable with the platform…McCarty hopes that Wayv will eventually take money out of the illicit market and use its cash-less convenience to convert consumers to regulated, legal cannabis.
“Our biggest competitor right now is the illicit market,” he said. “We’re going after them, and I think that digital payments will really set us apart.”
Why It Matters Today
The cannabis industry’s reliance on cash creates challenges that extend beyond payment convenience. Businesses operating legally under state laws must manage large volumes of physical currency while facing limited access to many traditional financial services. That can complicate everything from supplier payments and inventory management to security and recordkeeping.
Platforms such as WayV demonstrate how technology companies are attempting to build financial and operational infrastructure specifically for this emerging market. Integrating digital payments with ordering, logistics, and compliance could make it easier for licensed businesses to operate efficiently while providing another distinction between the regulated cannabis industry and the illicit market.
Key Takeaways
- The specific payment instruments underlying WayV’s platform remain unclear, making the broader payment model an area to watch.
- Federal cannabis restrictions continue to limit access to conventional banking and card payment services.
- WayV is combining B2B commerce, logistics, compliance, and payment capabilities for licensed cannabis businesses.
- Digital transactions could reduce the operational and security burdens associated with cash-heavy cannabis businesses.
- WayV sees cashless convenience as one way for the regulated cannabis market to compete with illicit sellers.
The development of cannabis digital payments highlights how specialized technology providers are responding to financial challenges created by the industry’s unusual regulatory environment. While questions remain about WayV’s underlying payment mechanisms and long-term business model, reducing dependence on cash could provide meaningful benefits for licensed businesses and help strengthen the infrastructure supporting the regulated cannabis market.
