CannaTrac Aims to Become the Go-To Payment Solution for Cannabis-- CFN Media
Seattle, Washington--(Newsfile Corp. - January 23, 2020) - CFN Media (OTCQB: CNFN), the leading agency and financial media network dedicated to the North American cannabis industry announces publication of an article covering CannaTrac's banking solution for the cannabis industry and beyond.
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The legal cannabis industry is projected to grow from $12.4 billion in 2019 to $23 billion by 2025, according to New Frontier Data, driven by the liberalization of medical and adult-use laws around the country. While federal regulations have started to catch up, the industry continues to struggle with a lack of access to the banking industry.
CannaTrac(R) developed the CannaCard(R) and the CannaCard App(R) to provide consumers and retailers with a convenient way to benefit from the increased safety and convenience of cashless purchases within the legal cannabis industry. By capturing early market share, the company aims to become the go-to payment solution for the cannabis industry and beyond.
CFN Media recently caught up with CannaTrac(R) CEO Thomas Gavin at MJBizCon in Las Vegas to discuss the company's recent progress and upcoming catalysts:
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Let's take a look at where CannaTrac(R) is headed over the coming months, why investors should take note, and how interested investors can learn more.
Following a Very Successful Model
Starbucks launched its mobile payment product back in 2011. By 2017, nearly one-third of all transactions were paid through the app rather than credit cards or cash. Customers paying with the mobile app spent three times more than the average customer, while the company was able to reduce credit card costs and fulfill orders more quickly.
The company's success was driven by two factors:
- Loyalty Systems - Starbucks built a lucrative rewards system with immediate 'stars' for each purchase, free drink offers, free refills and drink upgrades. Customers were already scanning their loyalty cards every day and adding a payment method was a small jump to make.
- Customer Engagement - Starbucks doubled-down on digital marketing by data mining their audience. Using these insights, they improved marketing campaigns and addressed the real needs of their customer base.
CannaTrac(R) is using these same levers in the burgeoning cannabis and hemp space. Customers are rewarded with points for each purchase that can be used at participating locations, while retailers can sidestep thorny banking issues and focus on growing their business. The solution also ensures that retailers are following compliance and KYC laws.
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In addition to brick-and-mortar locations, the company built an online plugin for CBD retailers that enables them to easily integrate CannaCard(R) payments into their ecommerce platforms. These retailers also have easy access to loyalty and rewards capabilities to incentivize repeat purchases that are difficult to implement as a standalone solution.
Leveraging Partners for Distribution
It's no secret that the payment space is very competitive with high barriers to entry. Many successful payment startups rely on industry partnerships to break through these barriers and reach the scale needed to succeed. For instance, new credit card startups often partner with existing banks rather than trying to acquire their own banking license.
CannaTrac(R) signed an agreement with Valid USA Inc. in December 2019. Under the terms of the agreement, Valid will provide the technology to implement, distribute, license and promote the company's payment solution software and products under the CannaCard(R) brand name. In essence, the company will be able to launch more features to more people.
The partnership is a big deal because Valid is the fifth largest producer of SIM cards in the world and one of the top ten global manufacturers of banking cards with 6,000 employees across 16 countries - it has the scale required to help CannaTrac(R) rapidly expand across borders and quickly launch the features needed to set it apart from the competition.
The company also partnered with Pacific Banking Corp. in 2019 to provide state-licensed dispensaries and CBD retailers with the ability to apply for the CannaCard(R) payment platform and banking services with PBC simultaneously with a single application. For many potential customers, it's the first time they have the opportunity for traditional banking services.
On the marketing front, the company recently announced a gifting booth partnership with GBK and In-Stand Media to take place from January 23 through January 26 to celebrate the 2020 GRAMMY Awards nominees and past winners. The off-site gifting booth will be giving away CannaCard® merchandise to celebrity attendees to raise awareness.
CannaTrac(R) is currently raising a $3 to $5 million seed round on top of a $15.7 million Series A to scale both domestically and internationally. The company plans to launch a redesign of its app in March 2020 and continue marketing at marquis and red carpet events.
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