Columbia Care (NEO:CCHW), a U.S. multi-state medical cannabis operator, is changing the game for the legal marijuana industry and how it takes payments. The New-York based cultivator announced last week it has launched the first-ever credit card for the U.S. legal cannabis industry, called the CNC 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
– Nicholas Vita, CEO of Columbia Care
One of the biggest issues facing the U.S. legal cannabis industry so far has been how customers and companies have to operate on a cash basis because of banking restrictions due to federal illegality. While the industry continues to wait to see if the SAFE Banking Act makes any progress in Washington, companies still have to continue doing business without access to the big banks.
While the new credit card program will only work at Columbia Care’s dispensaries, the company is considering making it available through industry partnerships as well. And the credit card should attract other companies given how it could increase sales by making it easier for consumers to make purchases in an industry starved for financial alternatives.
The company, which recently began trading on the NEO Exchange, did a pilot study for the credit card in the last half of 2018 in New York, and the results showed customers spent 18 per cent more on average with each transaction and frequented the stores more often. As well, Columbia Care said home delivery users became the fastest growing segment of the CNC program, increasing 25 per cent month-over-month in 2019.
Columbia Care has been slowing rolling out the program into Delaware and Pennsylvania and plans to have it available in all of its stores in 13 states by the end of 2019.
In addition to being able to attract more customers and higher average purchases, the card also gives cardholders additional benefits, including exclusive offers, discounts, and even cash back affinity programs, the company said.
Credit card gives Columbia Care an edge
As stated, no other cannabis company in the U.S. provides its customers the ability to use credit, so Columbia Care will enjoy a unique advantage over its peers while giving them a flexible payment solution that is lacking in the retail space for cannabis. For consumers not wanting to purchase pot using cash, Columbia Care offers an alternative that could help the company tap into a deeper pool of customers.
With competition in the U.S. ramping up for marijuana companies as the new industry develops, any advantage gained on competition is going to be significant. Not only can it help Columbia Care grow its sales, but it could also open up a whole new stream of revenue for the company should it choose to make its cards available to others in the industry.