Forget Independence Day. The real fireworks this year will materialize on July 1, when two developments will alter the medical marijuana landscape:
#1. Colorado will lift its two-year moratorium on new dispensaries, opening up the market to new players.
#2. Most dispensaries across the nation will no longer accept Visa and MasterCard transactions, as we first reported earlier this month.
The first one is an important development for several reasons. Colorado is now regarded in many circles as the epicenter of the medical marijuana industry, gaining more prominence and influence as California struggles with a crackdown and significant industry consolidation. So it’s pretty significant that the leading MMJ is allowing new dispensaries to open up shop, which will create opportunities for people looking to get into the industry and could help expand the market as a whole.
It also, however, will bring a new level of competitiveness to MMJ in Colorado. That could benefit patients in the end but will make it harder for the weaker businesses to survive. Current dispensaries will have to be at the top of their game and adapt to the fact that they no longer enjoy a relatively closed market. This should make the industry in Colorado stronger as a whole, but it will surely create some pain along the way.
The second development is sending a panic through the industry. With American Express already out of the picture, the loss of Visa and MasterCard as payment options means most dispensaries will have to deal only in cash. That is especially problematic from an operations standpoint, as it makes tracking and safely securing a logistical nightmare. It also puts dispensaries at greater risk for break-ins, robberies and crime in general. The lack of available banking solutions is one of the biggest issues facing the industry today and severely limits its growth. This development will no doubt exacerbate that problem and increase the urgency behind efforts to finding legitimate banking and transaction processing options.