Dreamer Dispensary in Southampton finds workaround for credit card cannabis customers

Dreamer Dispensary in Southampton is using blockchain technology — the same computer code that drives cryptocurrency — as a workaround allowing customers to buy cannabis products with credit cards.

“Dreamer’s ability to figure out how to allow consumers to pay by credit card speaks volumes to our commitment to innovation,” said Kevin Perrier, chief operating officer of Dreamer.

“We’re trying to lead the way in consumer selection and customer service, innovating every day to bring customers the best experience. Our new credit card payment model is another example of that.”

Credit card purchases will help bring recreational cannabis, now a $1.4-billion-a-year industry in Massachusetts, into the mainstream, Perrier said. The recreational cannabis business has brought in $3 billion in Massachusetts since the first legal retailers opened in 2018.

Eighteen states, two territories and the District of Columbia have enacted legislation to regulate cannabis for nonmedical use. But cannabis is still illegal under federal law, and that means federally regulated banks including credit card companies are unable or at least unwilling to get into the cannabis business. Cannabis companies in Massachusetts also have difficulty finding business lenders for the same reason.

Federal legislation, the SAFE Banking Act, that would ban banking regulators from penalizing banks that do business with the cannabis industry, has passed the House with bipartisan support, only to stall in the Senate.

“So that’s been the barrier to using credit cards,” Perrier said.

Trouble with the banking industry leaves customers forced to use cash, which is inconvenient and out of step with the rest of the retail world, where folks are used to putting all sorts of purchases on their plastic, Perrier said.

There are other solutions.

Customers can use an ATM in the marijuana shop, or make their purchases through a cashless ATM withdrawal, Perrier said. But those choices carry service fees: typically $3.50.

Other shops allow customers to buy marijuana with cryptocurrency purchased elsewhere with their credit cards. But that’s a complex process that involves navigating volatile exchange rates and markets. Lots of marijuana customers have no patience for that.

“Crypto is not that mainstream yet,” Perrier said.

Dreamer employs a third-party platform that relies on blockchain technology and runs on an InterPlanetary File System.

At Dreamer, consumers wishing to pay by credit card will receive a text message, enter their credit card information, hit send, and be handed their purchase. The secure transaction is completed in less than a minute.