POSaBIT Adds Two More States As the Market for Electronic Cannabis Payments Grows

POSaBIT Systems Corp., a payments provider for the legal cannabis industry, today added Texas and Georgia to its roster of states in which the fintech operates. The expansion provides further confirmation of growing demand for electronic payments in marijuana dispensaries.

Kirkland, Wash.-based POSaBIT said in a news release that it is now active in 18 states and aims “to enter a handful of additional markets over the remainder of 2022 and beyond.”

“As a company, we remain focused on expanding our geographical reach, and our entry into Texas and Georgia reflects both the hard work of our team and the overall reputation of our point-of-sale solution within the cannabis industry,” Ryan Hamlin, chief executive and co-founder of POSaBIT, said in a statement, “Our ability to serve any and all viable markets is a key proof point in our path towards exponential growth and scalability.”

What’s notable about the announcement is that in a February investor presentation, POSaBIT identified 12 states and the District of Columbia as target markets for expansion, but neither Texas nor Georgia were listed. Both states permit limited medicinal cannabis sales, but they don’t allow recreational marijuana. A spokesperson could not be reached Tuesday for comment about what’s changed in the company’s thinking.

What is clear, however, is that demand continues to grow for electronic payments in an industry which had an estimated $20 billion in sales last year, up 20% from 2020. But marijuana sales remain illegal under federal law in some states, which makes many banks and merchant acquirers reluctant to serve dispensaries even in states where they’re legal. Thus, cash dominates pot payments. “Approximately 70% of all dispensaries across the country remain exclusively cash-only,” says POSaBIT’s presentation.

Cannabis fintechs and analysts have long claimed that card, account-to-account, and other electronic payment services that don’t run afoul of federal banking regulations could increase sales at dispensaries. POSaBIT offers several payment services, including automated clearing house and PIN-debit options. 

The company also is developing franchise management, invoicing, payment rewards, and payroll and human resources services. POSaBIT says it handled $106 million in payments in 2021’s third quarter, up 151% from a year earlier, which helped boost revenues 174% to $6.3 million.