If you’re running a cannabis dispensary (or really any business), you’ve probably heard this phrase more than once: “Cash is king.” But what if we told you that cash might actually be costing your business more than it’s worth? In the world of cannabis payment processing, things are changing fast.
As more states legalize cannabis and the federal landscape begins to shift, retail dispensaries are looking for ways to streamline operations, cut costs, and—most importantly—stay compliant. One major cost center many dispensaries are overlooking? The cost of cash.
Let’s break it down—and show why transitioning to smarter, digital cannabis payment solutions is more than just convenient. It could be a serious boost to your bottom line.
The Hidden Cost of Handling Cash
According to a comprehensive study by IHL Group, retailers across North America spent over $96 billion in 2017 just on cash handling activities. That includes tasks like counting drawers, reconciling discrepancies, managing deposits, and paying for armored transportation. The study found that, on average, cash handling eats up 9.1% of a retailer’s revenue. Let that sink in.
That’s not profit. That’s pure operational overhead just to move pieces of paper from your register to the bank.
Now imagine applying that 9.1% to a cannabis dispensary operating on tight margins (and even higher handling fees). With cash dominating the industry due to federal banking restrictions, this cost becomes a serious drag on growth and scalability.
Cannabis Retail: A Cash-Heavy, Labor-Intensive Sector
Cannabis businesses—especially dispensaries—are often forced to operate as cash-only due to ongoing federal classification of cannabis as a Schedule I substance. This means traditional banking and card processing options are limited or off-limits altogether. But just because it’s the norm doesn’t mean it’s ideal.
Let’s say your dispensary processes $500,000 in monthly revenue. If you’re managing that entirely in cash, the hidden cost of cash handling could run you $45,000 per year or more. This includes:
- Labor costs for counting and reconciling cash drawers
- Time spent on audits and discrepancy reports
- Cash shrinkage (i.e., theft or errors)
- Fees for armored car pickups
- Bank charges for deposits and change orders
And that’s just the beginning.
The IHL Group found that the most expensive part of cash handling—by far—is closing drawers. In fact, retailers spent over $38 billion annually on this one activity alone. In the cannabis industry, where high-security requirements, tight compliance, and cash-only sales add layers of complexity, the costs are even steeper.
Is Cash Still King in Cannabis Payment Processing?
It’s understandable why cash remains dominant in cannabis. After all, options have historically been limited. But as technology and regulations evolve, cannabis payment processing solutions are stepping up—and they’re making it easier, safer, and more affordable to move beyond cash.
Here’s what modern cannabis payment processing can offer:
- ACH (bank-to-bank) payments that reduce fraud and eliminate card network restrictions
- Debit solutions that allow customers to use their bank cards without relying on federal credit networks
- Cryptocurrency integration that can eliminate volatility and provide seamless, compliant checkout experiences
- Smart Merchant Portals that automate transaction tracking and reporting
These aren’t future promises—they’re available now, and they’re already helping cannabis retailers lower costs and improve operational efficiency.
Why Cannabis Merchants Should Rethink Their Relationship with Cash
Even if you’re used to handling large volumes of cash, the hidden costs can’t be ignored forever. According to IHL’s data, grocery stores, who reported amongst the lowest cost of cash also have high transaction volume, average just 4.7% of revenue lost to cash handling. Even at that relatively “low” rate, a multi-store dispensary chain can bleed millions annually in preventable costs.
And that doesn’t even factor in the opportunity cost. Every hour your store manager spends counting money or preparing a bank deposit is an hour they’re not spending on:
- Customer engagement
- Employee training
- Inventory management
- Revenue-generating activities like upselling or running promotions
Labor Is a Major Factor in Payments —And Opportunity
The IHL study reveals something game-changing: Retailers can reclaim up to 500 hours of labor per store per month by reducing or eliminating manual cash handling. That’s a staggering amount of time that could be repurposed toward improving service or scaling the business.
In the cannabis sector—where employee turnover is high, labor costs are rising, and compliance is non-negotiable—this is more than just a nice perk. It’s a competitive advantage.
By implementing smarter cannabis payment processing systems, dispensaries can automate key parts of the cash lifecycle and redeploy valuable human capital where it matters most.
What About Cash and Security?
Here’s the elephant in the room: security.
Handling tens of thousands of dollars in cash every day makes cannabis businesses a high-value target. Whether it’s external threats like robbery or internal issues like employee theft, managing large amounts of cash increases risk at every level.
Cannabis-specific payment solutions reduce this exposure dramatically. Secure digital payments mean less money on-premises, fewer trips to the bank, and a significantly reduced risk of theft. Electronic cannabis payment processing can also improve cash flow and reduce bank-related delays.
Compliance and Reporting Made Easier With Electronic Cannabis Payment Processing
Cannabis is one of the most heavily regulated industries in North America. Dispensaries are required to maintain airtight reporting, transaction tracking, and financial transparency.
Modern cannabis payment processing platforms are built with these compliance challenges in mind. With features like real-time transaction logging, electronic cannabis payment processing doesn’t don’t just replace cash—it makes running a compliant operation easier and more efficient.
It’s Time to Upgrade
The cannabis industry is no stranger to innovation. From plant genetics to customer experience, dispensaries have been leading the charge. But when it comes to payments, many businesses are still stuck in the past.
If you’re serious about growing your cannabis business, reducing costs, and staying ahead of the curve, it’s time to rethink your approach to cash. With better cannabis payment processing options available, there’s no reason to let outdated systems drag down your efficiency—or your profits.
Cannabis Payment Processing, A Smarter Alternative
Cash may always have a place in retail, but it doesn’t have to dominate the cannabis space any longer. With mounting data showing how much cash handling really costs—and safer, smarter alternatives available—it’s clear that the future of cannabis retail is digital.
At Bankcard International Group, we specialize in providing secure, scalable, and compliant cannabis payment processing solutions tailored to your business needs. Whether you’re looking to reduce cash dependency, accept more payment types, or streamline compliance, we’re here to help.
Let’s talk about how you can reduce the true cost of cash—and unlock the next phase of growth for your dispensary.
Contact us today for a free consultation and learn how we can help modernize your cannabis payment strategy.
