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Technology Is Breaking Down Marijuana Banking Walls

Posted by DanaSmith on Wednesday Jul 27, 2016
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Meet Jane: The Startup To Help Your Cannabusiness

 

 

Being a cannapreneur can mean that you’ll get lots of cash, but the problem is, where do you store it? Hardly any bank will touch cash from cannabusinesses and this poses a huge problem for the industry. It’s such a big problem that it’s formed a niche for new businesses: security agencies trained especially to handle the increasing crime around dispensaries.

 


Colorado in particular, is a hot spot for both money which makes it a target for crime. The state is expected to rake in over $140 million in cannabis tax this year alone. Despite this, pot remains a Schedule 1 drug. Banks don’t want to deal with the risks involved in handling marijuana money so they choose to operate on cold cash only.

 

 

This is where Jane comes in, a startup that wants to help cannabusinesses face this tricky situation. According to Jeff Foster, co-founder of Jane, “There's still a great stigma in the banking community around marijuana. It's palpable.” Jane provides both software and hardware money management solutions for weed-based businesses. Because of this stigma, everything that deals with cash - from tracking sales to tax, becomes so much harder to handle.

 

 

Jane was developed by Yves Yon together with Foster, and Dave Ellerstein sits on the CEO chair. Foster thought about the idea after he watched documentaries on Netflix about marijuana prohibition.

 

 

Businesses simply need to install a Jane kiosk at the dispensary or retail shop so that customers can come in and press the touch screen or use the mobile app to place an order. They insert their cash on the device, get a receipt, then pick up the order. Jane machine are already operational in shops around Colorado.

 

meet jane

 


The cash is safe within the machine and the receipts allow businesses to securely and more efficiently track sales, payments, and even history. Jane machines are made in Colorado for around $15,000 each according to Foster. Aside from helping solve the myriad of cash and payment issues that are faced by marijuana businesses, Jane also hopes to solve retail shrinkage, which refers to lost inventory between what’s actually in the inventory and reconcile it with what’s been recorded.

 

 

Foster says that retail shrinkage happens to any retail business that deals with cash, even if it’s a liquor store. These businesses lose a part of their inventory to retail shrinkage. The National Retail Federation estimates that retail shrinkage cost businesses $45.2 billion in 2015 alone. This poses a greater problem for cannabis businesses since they deal purely on cash basis.

 

 

The Jane machines don’t come cheap, costing around $2,495 to $3,495 per month. However, Foster says that they’ve examined many different business models. “And in every model we worked on, eliminating the shrinkage makes it worth it for a dispensary to lease a Jane kiosk”, he adds.

 

 

This issue hasn’t gone unnoticed in the government; last June the Senate Appropriations Committee voted to permit banks to touch marijuana money. However it will still take some time for legal pot businesses to be able to enjoy financial services at a bank.

 

 

Foster has experience working in retail payments as well as risk management where he has worked for decades. He says that until the worries of banks, particularly when it comes to auditing dispensaries, are addressed, they probably won’t care about marijuana money. But now with Jane, banks can go online and see all the financial transactions coming in. In fact through Jane, banks can also efficiently track transactions to the seed number. Jane is also working on providing an express order service that caters to dispensaries. According to Foster, the future of Jane will be “heavily weighted towards express ordering and pre-ordering.”

 

 

The peak hours of dispensaries are between 4 and 7 pm, which Foster refers to as Christmas season. During these busy hours, Jane can help take the burden from dispensaries by streamlining the order process and reducing wait times.

 

 

This is good news. Other tech and financial businesses that cater to cannabusinesses also feel the same. Jessica Billingsley, COO of MJ Freeway says, “Jane offers a great cash-management solution, and we certainly recommend them to our clients.” The two businesses have also entered into a strategic partnership.

 

 

In an in interview with CNBC, Ann Gordon of Herbal Underground in Colorado said, “I think the best thing for us is to allow our regular customers to have an opportunity to not have to wait in line.”

 


Thanks to startups like Jane, the marijuana industry can worry less about financial transaction - this is a huge weight off their shoulders.

 

 

 

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