The legal cannabis market appears to be set to grow even more quickly. The supply shortage plaguing the industry seems to be easing, emboldening Ontario, after its slow start, to announce the opening of 50 new retail stores this fall.
In 2019 the province’s recreational sales jumped from $7.7 million in March to $19.7 million in April, after its first stores opened. With new stores opening across Canada and being on the cusp of the legalization of edible, drinkable, extracts and topical cannabis products on October 17, sales growth could be exponential.
To take advantage of this growing opportunity, new cannabis retailers must walk a tightrope. On one hand, they must be competitive, entrepreneurial and customer-service oriented. And on the other, they must be extremely disciplined and careful to stay compliant in the country’s high-regulated and fast-changing legal cannabis market.
To manage this balancing act, here are six things that new cannabis merchants need to know:
1. You Have to Be Certain About Who You Are Dealing With
Both the federal and provincial laws governing legal cannabis production and sales are designed to put the black market out of business and ensure that cannabis doesn’t get into the wrong hands, especially those of minors.
This is why it’s very important you know who you’re dealing with when a cannabis e-commerce transaction takes place. With a Merrco’s payment solution, more than 200 possible points of data are checked in real time after product is selected and payment information entered, to verify the customer is who they say they are, and are located where they claim to be, to ensure they are legally authorized to make the purchase.
The product is then shipped via registered mail or secure courier to maintain the seed-to-sale chain of custody.
2. You Must Offer a Variety of Payment Options
Customers can be encouraged to make purchases by offering the types of payments they like to use – this goes for both brick-and-mortar stores and e-commerce platforms.
Cash is no longer king. People prefer a variety of payment methods, from on-line to chip and PIN or tap. As a cannabis retailer, you must set up a dedicated merchant account or to accept payments from major cards that include Visa, Mastercard, American Express, and Discover.
In addition to using debit and credit cards, more people are opting for convenient digital wallet solutions using their smartphones. Being ready to accept payment methods such as WeChat, AliPay, Google Pay and Apple Pay will offer your customers a variety of options.
3. Simplify the Checkout Process Where You Can
Whether shopping online or in a physical store, people are turned off by a long and cumbersome checkout process, either abandoning a transaction before it’s done or taking their business elsewhere.
In a store, one strategy to reduce checkout lines is to arm sales staff with mobile point-of-sales terminals, so they can prepare orders and the pending payment transaction with customers wherever they are on the floor.
In an online environment, you can reduce the number of people abandoning shopping carts by making the checkout process as simple and short a possible, with a minimum number of different screens and clicks needed to complete the transaction.
4. Make Sure Your Systems Talk to Each Other
You don’t want a cumbersome process for you or your customers where your new payment system doesn’t talk to the existing one, or doesn’t integrate with your chosen e-commerce platform.
Merrco terminals are integrated with leading POS systems, including COVA, Greenline and Barnet POS. We are also fully integrated with leading e-commerce and seed-to-sale software platforms, including Shopify, Woo Commerce, Theracann, Ample Organics, CROPsoft and Kind Government Solutions.
5. Keep Your Transactions Secure
With risks of identify theft, data breaches and various forms of fraud, the cannabis payment system you use must incorporate the latest safeguards, including transactions secured with SSL protocol, compliance with Payment Card Industry Data Security Standards (PCI DSS), tokenization of data and other fraud-prevention tools.
At the very least, your system should have three basic tools in place:
- CVV—The numeric security code on back of card.
- AVS—Authenticating the address attached to the card.
- 3D Secure—Incorporating tools such as Verified by Visa and Masterpass by Mastercard into the payments system, adding yet another password authentication requirement for customers
6. Have a Flexible System That Keeps Up with the Changing Industry
Canada’s legal cannabis industry has evolved considerably in less than a year’s time, and will go through go through yet another major shift as cannabis edibles, extracts and topicals become legal.
As the Canadian leader in cannabis payment solutions, with roots that go back to the medical cannabis market, we ensure that our systems are flexible, incorporating the latest government regulatory changes, with fully customizable federal and provincial compliance controls.
With the peace of mind that comes with a Merrco payment processing solution, you will be able to concentrate on turning your business into a growing success.