This is a first, but let’s stuff some thoughts into the pipe and smoke it, so to speak. This brief piece is in TheGrowthOp and discusses WayV, which is a 2017 L.A. startup with a B2B cannabis logistics and compliance platform that delivers inventory to cannabis retailers. The point of the piece is to discuss a B2B payments capability that provides an easy alternative to what are often cash exchanges.
The U.S. federal prohibition on cannabis, thanks to the Drug Enforcement Administration’s (DEA) classification of the drug as a Schedule I narcotic, means that cash is often the only way to pay at many U.S. pot shops, since credit card companies and financial institutions tend to steer clear of working with anything cannabis-related.
McCarty is the CEO of Wayv. The year-old company, based in Venice Beach, Calif., has created an Amazon-esque sales platform for state-licensed cannabis retailers in California to make online sales and schedule one-day deliveries. It has already stacked up millions on a monthly basis.
While we get that, there is no detail on what the payment instrument(s) is that is enabled by the platform.The site does not reveal this, so we’ll have to wait to read more detail at a separate time, or maybe chat with the founder, who also previously launched a site called Eaze, an earlier medical marijuana startup which appears to be a retail version of the marketplace.
A quick browse there and one can see many interesting things for sale, almost all of which these eyes have not before considered (no, really.) The founder has the right idea; let’s make money and move the market away from the bad guys.
The caveat? The company has yet to turn a profit, although it has plans to capitalize on the payment system by eventually charging transaction fees. For at least part of 2020, however, the fees will be waived to get consumers familiar and comfortable with the platform…McCarty hopes that Wayv will eventually take money out of the illicit market and use its cash-less convenience to convert consumers to regulated, legal cannabis.
“Our biggest competitor right now is the illicit market,” he said. “We’re going after them, and I think that digital payments will really set us apart.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group