Cannabis Crypto: An Alternative Business Model for IADs

What do cannabis, crypto, and ATM businesses have in common? They are high-risk industries unsupported by the federal government. All three of these industries are prone to unlawful business practices. 

Not fully supported by the federal government, these businesses find it difficult to bank safely and affordably. Often, business owners have to find a work-around, pay ridiculous fees and taxes, and/or face extreme scrutiny and audits. 

Could cannabis crypto be an alternative business model for IADs that serves as a solution? Find out how the three industries overlap and can work together.

ATM Businesses as High-Risk Accounts

It’s no secret that many banks are hesitant to take on ATM business accounts. The cash-heavy nature of ATM businesses make them high-risk due to the potential for money laundering activity. Banks have to be especially wary of such liabilities. They are held responsible for servicing companies that conduct unlawful business practices. 

In 2021, the Office of the Comptroller of the Currency (OCC) finalized its rule to ensure fair access to banking services by various financial institutions. This means that banks cannot make blanket decisions for whole categories of customers when provisioning certain services. Instead, they must conduct individual risk assessments for each customer.

However, many ATM owners still report difficulty finding ATM business-friendly banks. That’s probably because of the difficulty in making a good impression during the risk assessment….

Not only are ATM business accounts risky for banks to service, they are also expensive. The potential for audits, compliance reviews, investigations, and regulation changes are heightened for banks that do take on ATM business accounts. 

They also face federal penalties for servicing a company that engages in money-laundering activity or fraud. Banks that service ATM businesses have to meet their cash needs as well. It can be costly to order the cash necessary and make drop-off arrangements. 

These costs might be manageable for larger banks, but they are notoriously less likely to take on ATM business accounts due to the scrutiny they already face. And smaller banks are less likely to take on the extra costs. Therefore, there are few banks that IADs consider ATM-business friendly. And the ones that are can still close accounts at any time with little to no warning.

This uncertainty is a costly threat to ATM business owners. They cannot consistently provide their service if their access to cash is disrupted abruptly.

Cannabis Illegal Under Federal Law

Similar to ATM businesses, legal cannabis businesses also struggle to find access to safe, affordable banking. Although legal in many states, whether medicinal or recreational, cannabis is still illegal under federal law. This means that banks, federal institutions, are bound by certain regulations when it comes to providing services to businesses in the cannabis industry. 

Dispensaries cannot accept debit and credit transactions for cannabis-related goods and services. Since cannabis is illegal at the federal level, banks and credit card companies won’t allow these transactions to take place over their networks. And banks have to tread lightly to avoid breaking money laundering laws or servicing businesses that engage in illegal business practices.

That leaves dispensaries no option but to accept cash exclusively. You can imagine the risks this poses to these businesses. Not to mention the costs. 

Barred from the traditional banking system, dispensaries are forced to pay excessive fees to bank at state-chartered institutions or hoard cash on-site. And keeping cash on-site is not a cheap alternative. This makes dispensaries targets for robberies and increases the level of internal theft.

Add to that the costs of increased security such as safes, cash-counting equipment, cameras, weapon detectors, and other physical reinforcements. And to combat internal theft, there are the costs of background checks and training.

Nor is cash a hassle-free alternative. Cash transactions in the cannabis industry are especially subject to meticulously scrutinized payment and tax speculation. This causes dispensary owners to fear federal-level accusations of illegal or suspicious business practices.

The stigma surrounding the cannabis industry for the potential of criminal activity hurts dispensaries’ ability to provide legal goods and services to their customers.

Crypto Not Accepted as Legal Tender

Although a popular payment solution for many reasons, cryptocurrency is not accepted as a legal tender. It is a high-risk investment because of its volatility. Furthermore, since it’s a decentralized currency, it is difficult to regulate and, more importantly, to tax. 

“[Crypto-savvy retailers] will accept cryptocurrency payments and be exposed to either capital-gains risk or the risk that these currencies will lose their value suddenly and without warning when tax payments and rent are due,” says Khurshid Khoja. The unpredictable nature of crypto makes it impossible to rely on 100%. This means that businesses still must depend on banks for operations such as payroll, taxes, and other expenses like utilities.

Anyone can use cryptocurrency to purchase goods and services. But because it lacks the qualities of traditional currency, it isn’t considered a legal tender. Therefore, although it may be a convenient form of exchange for consumers, merchants run into complications when accepting it. Add this to the number of complications cannabis businesses that want to accept crypto payments already face.

SAFE Banking Act

The Secure and Fair Enforcement (SAFE) Banking Act is intended to give companies access to banking services that are currently unavailable. The SAFE Act would eliminate penalties for financial institutions that provide services to cannabis businesses. Therefore, it would prevent cannabis businesses from experiencing unexpected account closures.

It has passed multiple times in the House but has yet to be approved by the Senate. Without it, the cannabis industry lacks access to loans, capital, and basic bank accounts. 

The SAFE Banking Act would also allow dispensaries to minimize the amount of cash they store on-site. This would in turn minimize the amount of robberies they experience. This contributes to the overall safety of dispensary workers and the surrounding communities.

Cannabis Crypto: A Possible Solution

The Problem

Cannabis locations are already prime locations for ATM placement due to their reliance on cash transactions. Additionally, because of the nature of the business, cannabis dispensaries are not authorized to own or operate ATM machines. 

They’ve even run into problems with cashless ATM machines. Visa prohibits their use because oftentimes point-of-sale (POS) purchases get miscoded as ATM cash disbursements but do not actually disburse cash which affects the interchange.

So dispensaries cannot accept debit or credit transactions, and cash transactions are a liability. But what about crypto payments? According to Cheyenne Ligon and Sage D. Young, crypto isn’t a fool proof solution, but it’s a start. 

Benefits for Dispensaries

First of all, the blockchain associated with cryptocurrency allows dispensaries to process payments affordably and prevents them having to go through third-party processors. Furthermore, crypto wallets offer a level of security not provided by the traditional banking system. 

While the federal government is concerned about the use of crypto in illegal activities such as money laundering and tax evasion, the crypto wallets actually ensure accurate reporting by using the blockchain as an audit trail. It can indicate how businesses receive payment and from which wallets.

Cannabis crypto also benefits customers by offering them a safe and convenient alternative to cash or card payments. “Crypto transactions make paying for cannabis goods and services more accessible, as anyone with a smartphone can make a low-cost transaction,” says Casia Lanier.

Although the number of crypto users is relatively low, it is increasing steadily. The more businesses that accept and promote crypto payments, the more public perception crypto will receive, and the more widely accepted it will become.

For those in the business of cannabis, crypto-to-cash payment platforms have encouraged the crypto-curious to take the leap. Benefits include less volatility and guaranteed compliance.

More and more dispensaries will be moving to cannabis crypto payments, if for no other reason, for an alternative to traditional banking services that aren’t available for them today.

The rise of instant crypto-to-cash payment platforms has helped some crypto-curious cannabis companies feel more comfortable about accepting crypto payments, both in terms of avoiding volatility and ensuring compliance with regulations. 

According to Lanier, “the potential for crypto transactions becoming accepted forms of payment is high, and the barriers to entry are almost non-existent for businesses across every industry…For businesses thinking of integrating crypto payment solutions, there is no better time to do it than now.”

Cannabis Crypto an Alternative Business Model for IADs

This is good news for IADs. Cannabis crypto provides ATM owners with a new and relatively untapped market for machine placements and uses. 

Bitcoin ATM machines (BTMs) function very much in the same way as regular ATM machines. This makes them approachable and user-friendly for business owners, consumers, and IADs. 

By offering BTM services to cannabis businesses, IADs can bring cannabis, crypto, and ATM industries together to bypass traditional federal banking regulations that so often shut these businesses out.

Want to convert your ATM machine into a BTM? Interested in getting into the cryptocurrency game? Contact us today to discuss your options!

Cryptocurrency ATM: Should You Add One to Your Fleet?

A cryptocurrency ATM is very similar to a traditional ATM. That’s part of what’s making them so popular. Their familiarity and ease of use lessen users’ apprehension and therefore draw more and more customers every year.  

You might already be familiar with cryptocurrency. You might buy and sell it yourself. If so, you might wonder whether adding a cryptocurrency ATM to your fleet is a good idea. Take some time to weigh the pros and cons when making your decision. 

New to cryptocurrency? Cryptocurrency ATMs are explained next!

What is a Cryptocurrency ATM?

A cryptocurrency ATM is an ATM machine that allows you to purchase and sell cryptocurrency. If you can picture a traditional ATM machine, you can imagine a cryptocurrency ATM machine. They look and function very similarly. And some ATM machines are converted to cryptocurrency ATM machines.

You might have heard of Bitcoin ATM machines, or BTMs/BATMs. It’s all the same. BTMs can be configured to enable all kinds of cryptocurrencies, not just Bitcoin. Some BTMs are unidirectional, meaning you can only use the machine to purchase cryptocurrency. Others are bidirectional. They allow you to buy cryptocurrency as well as sell it in exchange for cash.

BTMs do not connect to users’ bank accounts. Instead, users access their digital wallets from a cryptocurrency ATM. For many, this is much more convenient than suffering the longer wait times of online buying and selling. 

The United States leads the world with over 36,000 cryptocurrency ATM machines. That number has risen 8% since December 2021. Cryptocurrency is only getting more popular, and the need for convenient access is increasing. Should you join the cryptocurrency craze? Let’s take a look at some pros and cons of cryptocurrency ATMs.

Pros of a Cryptocurrency ATM

Easy to Use

First, a major draw of cryptocurrency ATM machines is that they are easy to use. This makes it a convenient service that crypto customers want and need. It’s important that people feel safe buying and selling cryptocurrency. BTMs provide them with the familiar comfort of a traditional ATM machine. A BTM transaction is similar to a regular banking transaction that most people understand.

Second, BTMs offer quicker transaction times than cryptocurrency trading websites. This offers customers a convenience they can only experience with a cryptocurrency ATM machine. 

These benefits support the need for more cryptocurrency ATM deployments.


BTMs are shiny and new! Those who aren’t already buying and selling crypto might see your cryptocurrency ATM machine, become curious, and try it for themselves. And guess whose machine they will use when they’re ready…. 

If you are an independent ATM deployer (IAD), adding a BTM to your fleet could set your business apart from the competition. You diversify your portfolio and have another service to offer customers, a one-stop shop if you deploy an ATM and BTM in the same area. 

If you are a business owner, having a cryptocurrency ATM in your business gives more people a reason to go there. You bring in more customers and passers-by when people hear that you offer BTM services. 

In either case, IAD or business owner, since BTMs are still relatively new, you could get ahead of the curve and corner the market for crypto services in your area.

Cash Recyclable

Some cryptocurrency ATMs are able to recycle cash. What this means is that the cash that users insert to purchase cryptocurrency can be the same cash that the machine dispenses to users who sell their cryptocurrency via your machine. 

Even if your BTM is unidirectional, and users can only purchase crypto from your machine and not sell it, the cash that users insert can be the same cash you use to reload your ATM machine. This can save you time and money working with a bank for your cash loading needs.


Cryptocurrency transactions are very secure with the help of blockchain technology. This is a large part of why more and more users are demanding more BTM deployments. Crypto users want a safe, secure, trusted way to buy and sell cryptocurrency. BTMs offer that with two-factor authentication and secure online transactions. BTMs can authenticate customers by ID, fingerprint, or QR code.


There are many different ways to profit from a cryptocurrency ATM. The extra service brings locations more foot traffic, and you save money on credit card company and bank fees.

You also earn revenue from each cryptocurrency transaction made on your machine. Unlike traditional ATM machines, BTM transaction fees are a percentage of the transaction amount. However, with its popularity rapidly increasing, the BTM business can be quite profitable. 

Cons of a Cryptocurrency ATM

Equipment Costs

The first potential con to consider is the cost of equipment. Machines can cost as much as (if not more than) a traditional ATM machine. However, you can see about downloading software to an existing ATM machine that provides your ATM with cryptocurrency capabilities.

Niched Market

Cryptocurrency ATMs are much more popular in large cities like Los Angeles, Chicago, and New York. That is not to say that a BTM in your hometown wouldn’t do well. You just have to gauge the amount of need for the service in your area. Do you think you could bring in enough transactions each month to justify the time and money it would cost to operate it?

New Technology

Although BTMs are very similar to traditional ATM machines in structure and function, you still might experience a learning curve with the new technology. You have to consider whether or not you have the time to devote to learning the new technology, keeping up with changes, researching the fluctuation of transaction fees, and solving technological issues that could arise.

Different Compliance Rules

This may or may not be a con for you. You know there are certain rules and regulations you have to follow to operate an ATM machine, so why would a BTM be any different? 

BTMs are considered money services businesses (MSBs), so you have to register your business as such with the U. S. Treasury’s Financial Crimes Enforcement Network (FinCEN) when getting started. Then, you will purchase a custom-built Anti-Money Laundering (AML) program

Financial regulations are nothing new, and they protect you and your customers. These might just add a few extra steps and take some getting used to.

Should You Add a Cryptocurrency ATM to Your Fleet?

Unless you have any particular hang-ups about getting involved in cryptocurrency, it’s a good option to consider IF you find a promising location that justifies the cost of the equipment or software.

Like any business, there are certain risks involved in the decision-making process. You might risk your BTM not performing well. You might find that there isn’t the demand you thought there would be. However, this might just mean that your return on investment takes a little longer than you expected. If all else fails, remember that you can always try to move the machine to a better location! Like an ATM business, cryptocurrency ATMs are simple, flexible ways to generate passive income. Interested in learning more about your cryptocurrency ATM machine options? Talk to us today!

How to Start a Bitcoin ATM Business

Before you learn how to start a Bitcoin ATM business, there are some important questions you might have. In this article, we’ll cover the basics.

Although intimidating to most, cryptocurrency is steadily increasing in popularity. A major draw of Bitcoin ATMs, therefore, is their ability to lessen users’ apprehension. They are quick and easy to use, and they are very similar to regular ATMs consumers already use on a daily basis.

If cryptocurrency interests you, then it might be time to learn how to start a Bitcoin ATM business.

What is a Bitcoin ATM Machine?

Bitcoin is a cryptocurrency, or digital money, created in 2009. Bitcoin can be used to make purchases both locally and internationally. It can be bought, sold, transferred, and traded. This is where Bitcoin ATMs (BTMs) come in.

One-way BTMs only allow users to purchase bitcoin. Bitcoin can be purchased with cash or debit card. BTMs with two-way functionality allow users to buy and sell bitcoin for cash.

Bitcoin ATM machines look like traditional ATM machines. BTMs, however, do not connect to bank accounts. Instead, users connect to a digital bitcoin wallet or exchange, a digital marketplace for buying and selling bitcoin.

The world’s first Bitcoin ATM was made available to the public at a coffee shop in downtown Vancouver, Canada in 2013. Although that particular machine is no longer in operation, many other machines have been placed around the world since.

How Popular are Bitcoin ATM Machines?

Bitcoin ATM machines are gaining popularity across the world. studied Twitter user data and the prevalence of Bitcoin ATM machines to determine the world’s most crypto-friendly cities.

The 5 American cities with the largest number of BTMs are Los Angeles (with 1,065), Chicago, Houston, Atlanta, and Dallas (with 486). However, to really determine the popularity of cryptocurrency in each state, it’s important to consider the number of residents per BTM. 

In that case, Harrisburg, Pennsylvania takes the win with 80 BTMs, about 1 BTM per 16 residents. Runners up are Orlando, Florida; Newark, New Jersey; Trenton, New Jersey; and Atlanta, Georgia. 

The United States is the leading country in the number of BTMs per 10,000 residents.

The allure of bitcoin for consumers comes from its anonymity and the potential to become rich through trading and investing. BTMs encourage trading and are popular among the “bit-curious” because the process is familiar—just like a traditional ATM machine—which helps remove some of the skepticism of online currency and trading. 

Furthermore, purchasing and trading through a BTM machine are quicker than using an exchange website. It takes seconds to buy a fraction of a bitcoin with a BTM whereas online exchanges sometimes impose minimum purchase limits and trading can take days. Since bitcoin is so volatile, quickness is crucial.

From a small business perspective, Bitcoin ATMs are easily adopted for the same reasons traditional ATMs are: they draw more traffic and customers and, for those that accept cryptocurrency payments, reduce credit card fees.

How to Start a Bitcoin ATM Business

Starting a Bitcoin ATM business is very similar to starting a traditional ATM business. The 5 steps for starting an ATM business are to get compliant with paperwork, select and purchase an ATM machine, find a location and place the machine, set your surcharge, and start making money by getting people to use your machine.

A Bitcoin ATM business can also be started in just 5 steps:

  1. Get compliant by registering AML/KYC requirements
  2. Purchase a Bitcoin ATM machine
  3. Find a location and place your BTM
  4. Supply bitcoins
  5. Start making money

Get Compliant

To run a Bitcoin ATM, you must register yourself as a money services business (MSB) with the U. S. Treasury’s Financial Crimes Enforcement Network (FinCEN). MSBs are regulated by FinCEN and require an Anti-Money Laundering (AML) program.

AML programs are designed to prevent money laundering activities through the use of a Bitcoin ATM. There are certain elements that an AML program must contain, but you can purchase custom-built programs based on your business needs. 

Know Your Customer (KYC) verification is another regulation feature that is integrated into the BTM interface. The purpose of KYC is to decrease fraudulent activities anticipated in a Bitcoin business by identifying customers and flagging suspicious activity.

Depending on where your BTM is located, you may need to adjust the limits on deposits and withdrawals. This could require a money transmitter license. You can always check with a professional, such as your provider, to ensure you are fully compliant.

Purchase BTM Machine

BTM machines start at around $3,500 for one-way and $6,500 for two-way. Just like purchasing ATM equipment, you will want to purchase a machine that has the features you prefer.

Consider security features like cameras and locks that prevent both physical and network attacks. See if you can manage the machine remotely, if that’s important to you. You might also want a machine with cash recycling abilities to save yourself time in the long run.

What bill capacity do you need for your location? Do you want your machine to have battery backup in case of a power outage? Does the machine come with a warranty?

Think about the user experience as well. Is the interface easy to use? Do customers sign in with a QR code, thumbprint, or hand print scan? Are transactions fast?

Finally, make sure you purchase from a provider that offers ample support. Check reviews, methods of contact, and hours of operation. You can’t make money if your machine isn’t working properly, so these are important factors when it comes to purchasing equipment.

You might already be an independent ATM deployer (IAD). In that case, you should consider upgrading your current ATM machine to one with bitcoin capabilities. Check with your ATM provider to see if this is an option for you.

Place BTM

If you’re looking for the best location to place your BTM, you’ll want to consider where there are large populations of bitcoin and cryptocurrency enthusiasts. identified the world’s top cities listed in the profiles of Twitter crypto users. 

Three U.S. cities made the top 5: New York, Los Angeles, and San Francisco. Chicago, Miami, Austin, Las Vegas, Atlanta, Seattle, San Diego, Houston, Boston, and Washington D.C. also made the list (in that order).

Who Uses Cryptocurrency?

Cryptocurrency exchange company Gemini conducted a study that analyzed the crypto habits of 3,000 U.S. adults aged 18-65. The report released in April indicates that the average age of cryptocurrency owners is 38. Men make up 74% of crypto owners. So if you want to draw these customers, look for locations that service this demographic: bars, cigar shops—the first BTM in the U.S. opened in a cigar shop in Albuquerque, New Mexico—gentlemen’s clubs, etc.

Millennials are increasingly becoming the majority of crypto investors. This is due in part to their comfort making technology-based investments like bitcoin and using trading apps. 

According to Lisa Kramer, expert in investor behavior, younger generations are also more confident traders of cryptocurrency because they likely didn’t experience the 2007-2008 financial crisis or the 2000 internet crash. These events make older generations wary of technology-based investing. This makes universities and surrounding businesses good locations because of their proximity to bold, young traders. 

Although only a small percent (14) of Gemini’s study sample are crypto owners, 63% reported being “crypto-curious.” This could mean a potential shift in crypto’s audience. For example, 53% of crypto-curious participants were women and a quarter of those were 55+ years old.

This could expand successful BTM locations to restaurants, shops, shopping centers, and salons. Keep in mind the benefits for small businesses as well. You could approach small businesses with the promise of a diverse group of patrons to their stores as well as minimized credit card fees if they are willing to accept crypto payments.

And of course, just like traditional ATM machines, traffic is key. So look into busy convenience stores, coffee shops, retail stores, restaurants, and bars. You want your machine where the people are.

Supply Bitcoins

There are three ways to supply bitcoins for your BTM and customers.

First, you can purchase bitcoin from trusted, secure cryptocurrency exchange sites like Make your purchase online with your checking account or card number, and the bitcoin adds to your bitcoin wallet.

Second, you can conduct “over-the-counter” transactions. This is where someone sells his or her coin to you directly rather than use the BTM machine. The bitcoin gets transferred to your wallet, and you pay the seller the cash equivalent.

The third way is to recycle coin. You won’t be able to do this until you’ve been operating your machine for a while, but recycling is when coin that one user sells is then purchased by a subsequent user. So you build a repository of coin from users who sell on your machine to then pay to purchasing users.

Start Making Money

Transaction Fees

Just like a traditional ATM business, your profit from operating your Bitcoin ATM machine comes from transaction fees. While ATM surcharge fees are a set amount regardless of the transaction amount, BTM transaction fees are a percent of the transaction. So if you charge 12% and someone purchases $1,000 worth of bitcoin, that’s $120 in your pocket.

Transaction fees are between 10 and 20% on average. However, they range anywhere from 7% to 25%. You’ll have to find a balance between a fee that provides you with your desired income and that’s also fair enough for your customers to encourage business.

Operational Costs and Profit

When it comes to operational costs and profit, the numbers will vary, so it’s hard to provide you with guaranteed figures. However, let’s consider this example:

Say your machine collects $30,000 in transactions in a given month ($50-60,000 possible for high transaction months). Your transaction fee (like an ATM surcharge) could be 10-12% (This number is much higher than what you might set for a traditional ATM machine due solely to the lack of competition.). You make a gross total of $3,600.

Now, what costs do you need to deduct from that? First is your rent fee for your BTM location. This could be as little as $150 to rent space in a small business or as much as $500 to rent space at a large shopping center.

Second, you need a budget for maintenance and supplies. Account for things like receipt paper, cleaning supplies, and maintenance costs should anything go wrong with the machine. You might allot $30-$40 for this.

Third, you will more than likely want to purchase an insurance policy for your machine, too. This will vary based on a number of factors (company, policy, location, etc.), but you can estimate $40-$50 for general liability.

Last is compliance. You will probably spend about $100 for an AML program.

After you deduct these costs, you are still looking at about $3,000 net. Not too bad for passive income!

Should I Start a Bitcoin ATM Business?

Just like a traditional ATM business, a Bitcoin ATM business can be a good source of passive income. It will require an initial investment and some hard work finding the right location and experimenting with the transaction fee. But once you get started, in most cases BTM management can be conducted remotely.

Most importantly, cryptocurrency is here to stay. Adoption rates have been rapidly increasing and its audience is becoming more and more diverse. During its advent, cryptocurrency was really only an investment option for those with a large amount of assets. Now, it’s becoming more mainstream and available to the average person—your target audience.   

Traditional ATM or Bitcoin ATM Business?

Traditional ATM and Bitcoin ATM businesses are very similar in structure. The differences lie in the details: machine features, compliance regulations, banks, start-up costs, profit potential, and of course currencies. If you’re interested in earning passive income, you can start an ATM business and work your way up. Or, you can jump right into a BTM business. Maybe you are already an IAD and are ready to venture into the world of crypto. Whatever your case may be, contact your service provider to get started!