Legal cannabis sales are skyrocketing, with U.S. revenues projected to exceed $ 28 billion in 2022, a whopping 60 percent increase from the numbers reported for 2020. But when an industry is on the rise, an influx of questionable people and companies inevitably follows, resulting in a steady stream of opportunists trying to make quick money off of hard-working – but inexperienced – business owners. Here are some things you can do to protect your business from scammers who come with all kinds of promises:
Avoid credit card workaround solutions
If someone offers you a workaround to accept credit cards, immediately decline it. No matter what anyone tells you, none of the major credit card companies allow cannabis transactions on their rails. Everyone understands that customers value the convenience of paying by credit, but working with a provider who is violating card company bylaws just so you can keep your clientele happy is not an avenue you want to take. Earlier this year, two Eaze Technologies consultants were caught trying to trick banks into processing more than $ 100 million in credit card payments. Then they were sent to prison. jail. And they’re far from the only ones of their kind. There are plenty of criminals out there, so be careful not to look the other way or “forget” to ask questions if something doesn’t seem right.
Read your dealer agreement
Dishonest guys bet you won’t read the fine print. So read it! For example, some of the same payment processors that offer sketchy credit card workarounds will have a note buried deep in their merchant contracts that their policy is to hold a percentage of your money for a period of time. They will say the main thing is to make sure you are good with your payments, but this waiting period can create problems when you have an unexpected expense and you cannot access your funds to cover it. And what if your processor is caught violating the law and goes out of business? When that happens, they are never will give you the money back. Case in point: Linx Card recently closed and many of its retailer customers with reserves were just unlucky with no recourse.
Some crooked processors that shut down reappear under a different name. This can also be a headache for you, as working with operators who keep disappearing or jumping back and forth between different processors disrupts your operations. And interruptions have a tangible cost. In our experience at Dama, retailers who don’t use electronic payment see an immediate 25 to 30 percent drop in sales. You don’t want this to happen to you.
Don’t hide from the banking system
When you open a bank account – or have someone open an account to the You, like many shady players in the industry are going to offer – but don’t state that you use cannabis, the bank will inevitably find out and close your account. No matter how hard you try to obscure the nature of your business, sooner or later something will sound the alarm, be it a check from a suspicious company or too many cash deposits. And if you open a new account after yours has been closed, which is most likely the case, that account will also be closed. This cycle will continue until you are eventually blackmailed, which affects not only your business but your personal banking situation as well – and this can have a serious impact on your life outside of work. It’s just not worth it, so don’t do it.
Stay legal = stay safe
Every cannabis company wants to make money, but it is important to conduct your business legally and transparently, no matter how tempting the alternatives may be. You worked hard to get where you are so don’t throw it all away by getting caught up with scammers who are only after themselves. When something looks too good to be true, it usually is. And when you deal with cheaters, eventually they will cheat on you too.
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