Growing Need for Merchant Services As Cannabis Sales Pick Up Momentum After Latest Election Results

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Nov 16, 2020, 08:45 ET

FinancialNewsMedia.com News Commentary

PALM BEACH, Florida, Nov. 16, 2020 /PRNewswire/ -- One of the major problems for merchants selling cannabis and hemp-derived products, including CBD, is that they have to jump through hoops to be able to offer their customers credit card or mobile payment platforms. In effect… they have to "lie" (wink-wink) to banks that offer card services. An article from an industry insider, Payments Source, said that: "Cannabis sellers can accept card payments if they lie about their business category, but this is a risky and shortsighted strategy… The recent U.S. election could move the cannabis industry closer to the mainstream, but legal dispensaries will still have to deal with workarounds to accept card or mobile payments. Despite bipartisan momentum toward legalization, cannabis sellers, growers and merchants have long relied on circuitous access to financial services, since federal prohibitions have made mainstream banks reluctant to work with the industry. This has made it nearly impossible for U.S. cannabis sellers to accept mainstream cards and wallet apps… There's a chance for more substantial relief, but the politics are complicated." Active Companies in the industry include The OLB Group, Inc. (NASDAQ: OLB), Aphria Inc. (NASDAQ: APHA) (TSX: APHA), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), Tilray, Inc. (NASDAQ: TLRY), Canopy Growth Corporation (NYSE: CGC) (TSX: WEED).

The uncertainty of different state regulations and no federal mandate has resulted in a mix of blockchain, cryptocurrency and cashless ATMs, which are all complicated and inefficient. Cashless ATMs, for example, require extra hardware and do not have a direct connection with the merchant's point of sale. As a result, cash is still a major payment method. "We expect cannabis legislation to be enacted someday in the relatively near future…" said an officer of a Denver-based cannabis payments app… and an article in Marijuana Business Daily (MBD) they reported the elections have moved the ball forward, saying: " "The marijuana industry appeared headed for a clean sweep on Election Day, with voters approving new markets in Arizona, Mississippi, Montana, New Jersey and South Dakota that could generate more than $2.5 billion in medical and recreational cannabis sales a year by 2024. "With the passage of these initiatives, one-third of the population now lives in jurisdictions that have legalized cannabis for adult use, and 70% of all states have embraced cannabis for medical use," Steve Hawkins, executive director of the Marijuana Policy Project (MPP), said in a statement.

The OLB Group, Inc. (NASDAQ: OLB) BREAKING NEWS: OLB Offers Payment Processing Options for Cannabis and CDB Merchants - Citing new regulatory environment for banks, OLB will provide a safe alternative to cash-only for CBD merchants - The OLB Group, Inc., a provider of cloud-based omnicommerce and payment acceptance solutions for small- and mid-sized merchants, announced its SecurePay payment gateway and OmniSoft cloud-based business management platform are ready to support merchants selling cannabis- and hemp-derived products, including CBD. The services will be available to merchants as soon as US regulators allow.

A patchwork of legalization across the U.S., combined with federal banking restrictions, have limited bank involvement with CBD and cannabis sellers. But the relaxation of federal administrative rules in 2020, along with the recent approval by voters for legalizing CBD products in multiple states, have encouraged banks to pursue business in this sector.

"Both the legislative and administrative hurdles to offering banking solutions to CBD and cannabis distributors have been removed in 2020, and banks are now stepping up efforts to attract these merchants into their programs," said Ronny Yakov, chief executive officer of OLB. "As soon as banks are ready to approve these merchants, OLB is prepared to onboard and support their transition from a cash-based payment acceptance process to an omnicommerce business model that includes multiple payment modalities, as well as full-featured business automation and management capabilities."

OLB's SecurePay payment gateway platform offers support for traditional card-based payment processing as well as new models, including QR-code, mobile app solutions such as Apple Pay and Google Pay, and automated clearing house (ACH) account-to-account transfers.

In addition, OLB's OmniSoft business management platform offers merchants a broad range of tools to market, operate, and manage their business. Available features include web-builder tools, e-commerce, in-store, and mobile sales tools, marketing templates and campaigns, and a variety of back-office features for order management and fulfillment, warehouse and inventory operations, and integrated bookkeeping support.

Merchants, including those in the cannabis and CBD sector, interested in implementing omnicommerce services can set up an account at https://cardaccept.com/#contact.

For more information about The OLB Group, please visit http://www.olb.com and http://www.olb.com/investors-data

Other recent developments in the Cannabis industry include:

Aphria Inc. (NASDAQ: APHA) (TSX: APHA), a leading global cannabis company inspiring and empowering the worldwide community to live their very best life, recently announced management will host a fireside chat discussion at the Jefferies Virtual London Healthcare Conference on Wednesday, November 18, 2020 at 9:05 a.m. ET. There will be a simultaneous, live webcast available on the company's website. The webcast will be archived for 90 days.

Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), the Canadian company defining the future of cannabinoids worldwide, The Toronto Stock Exchange reported that Aurora Cannabis Inc. will list and post for trading 11.5 million warrants at the open on Nov. 16, 2020. As stated in its prospectus supplement dated Nov. 11, 2020, the company will issue 23 million units at $7.50 (U.S.) per unit in an offering, with each unit consisting of one share and one-half warrant.

The TSX reports that each whole warrant will be exercisable at $9 (U.S.) per share until 5 p.m. Toronto time on the date that is 40 months after the closing of the offering. The warrants will trade under the symbol ACB.WT.U, in U.S. dollars and under Cusip No. 05156X 16 5. The TSX has issued a separate bulletin regarding the listing of additional shares of the company.

Tilray, Inc. (NASDAQ: TLRY), a global pioneer in cannabis research, cultivation, production and distribution, reported financial results for the third quarter ended September 30, 2020. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

"Our third quarter results demonstrate the significant progress we have made throughout the organization despite the unprecedented challenges presented by the COVID-19 pandemic. We realized solid year over year revenue growth in our core businesses and have achieved a significantly more focused, efficient and competitive cost structure, all of which position Tilray for future success. We look forward to building on these accomplishments and remain focused on our goal of achieving break-even or positive Adjusted EBITDA in the fourth quarter," said Brendan Kennedy, Tilray's Chief Executive Officer.

Canopy Growth Corporation (NYSE: CGC) (TSX: WEED), a world-leading diversified cannabis, hemp, and cannabis device company, has released a highly giftable Martha Stewart CBD Wellness Gummies Sampler just in time for the holidays. Inspired by the French confection pâte de fruits, this elegant 60-count sampler box features 15 seasonal flavors such as Passionfruit, Calamondin and Quince.

Said Martha Stewart, "Holiday gift giving and receiving should be a joyous and fun occasion. In my experience, the gifts that are most appreciated are both luxurious and practical. Presented in a special gift box, my gummy sampler tastes like an elegant and delicious treat which delivers all the wellness benefits of CBD, making it the perfect way to indulge your loved ones, or yourself, without spending a fortune."

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