Banking for cannabis dispensaries remains tricky. The federal government still views cannabis as illegal and, for that reason, big banks typically won't go near dispensaries. That's left millions of new businesses to explore an expansive number of payment options since businesses can't be expected to keep stacks of cash under their mattresses.
Kore Compliance is looking to bring all those payment options under one umbrella by offering a new app called Budtendur. The mobile app and site offers a suite of payment options including PIN Debit, ACH And crypto and uses QR code to move money with just your phone.
Late last month, the Lincoln-based company raised more than $500,000 via a private angel investor and, according to Kore Compliance principal Ray Jorgensen, the company expects to secure its first client this month. Budtendur launched in the second quarter of this year.
“We’ve started with payments because that was where the biggest dispensary pain-point is and because this is central to our revenue model. We expect to grow to two dozen dispensary clients by the end of 2023 and double in size each of the next few years," Jorgenson said.
Kore Compliance was founded in 2019 by three partners — Amanda Lord Darbani, Colin Barry and Jorgensen. Jorgensen, who also owns Patient360, a Medicare Quality Payment Program reporting company, said he hopes to leverage his career knowledge of healthcare IT and lessons from an industry he watched from inception to multi-billion dollar maturity.
“I have been friends for 10+ years with Dick Radebach, minority owner of Greenleaf Compassion Center, and we had discussed the challenges facing dispensaries, especially around substandard software," Jorgenson said. "Most called whatever product they were using the “best of the worst.'
"(Our) lLong term goal is to build a retail business platform similar to practice management/electronic medical record (PM/EMR) products Colin had built and on which I had worked for 20+ years,” he said.
Jorgensen said Budtendur allows consumers to link their checking, savings, money market, or investment accounts to the app and electronically make payment at checkout. The app uses a secure QR code that is scanned by dispensary Budtendur allowing payment similar to Venmo, he said.
Jorgensen said Budtendur also offers variable rates to optimize pricing for dispensaries and their clients. Next features include budtendur (dispensary staff) tipping, messaging (many cell carriers disallow this due to federal illegality of product), and ability to load a “basket/cart” so folks can shop and pay, he said.
"We are paid a portion of the convenience fee and a percentage of the original charge," Jorgenson said. "Our product offering costs dispensaries the same or less than what they pay for having a single payment processor. Mitigating the volume of cash and moving more money electronically saves time, money, and resources for dispensaries, their customers, and their partner banks."
Currently, Kore Compliance has a headcount of three full time employees, but Jorgensen said the company would be hiring later this year.
"If you ask people who’ve been in/around the space for the past 10+ years, they consider the market mature," Jorgenson said. "Coming from 20-plus years in the healthcare reimbursement vertical, cannabis is still nascent. Cannabis payments are even more so… opportunity abounds."
