Payments

Why cannabis is the biggest ATM market

With a complex legal landscape and little access to payments, cash is king at the cannabis dispensary.

Photo: JHVEPhoto - stock.adobe.com

June 30, 2026 by Bradley Cooper — Editor, Connect Media

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Cannabis and ATMs are a match made in heaven. In a recent Bank Customer Experience Podcast episode with Todd McEwan, of New England ATM, he noted the most ideal spot for independent ATM deployers has moved from hotels to the cannabis dispensary. There are many reasons for this trend, such as the legal landscape, payments and volume.

The cannabis legal landscape

Cannabis is a big business in the U.S. despite the fact it sits in a legal limbo. In August 2013, the Obama Administration released a memorandum on marijuana law enforcement. This memorandum stated that federal enforcement of marijuana laws would be eased and states would be able to determine how or if they wanted to enforce those laws. As a result, the door became open for states to legalize marijuana for medicinal, recreational purposes or both.

Over the last 13 years, states have enacted a variety of policies.

According to DISA, cannabis is fully legal for medical and recreational purposes in the following states:

Alaska.
Washington.
Oregon.
California.
Nevada.
Arizona.
Montana.
Colorado.
New Mexico.
Minnesota.
Missouri.
Illinois.
Michigan.
Ohio.
Virginia.
Maryland.
Delaware.
New Jersey.
New York.
Vermont.
Massachusetts.
Connecticut.
Rhode Island.
Maine.

In most other states, it is either decriminalized, allowed for medicinal purposes or available via CBD with THC. It is only fully illegal in Idaho, Wyoming, Kansas and South Carolina, according to data from DISA.

Payments issues

Despite this trend, cannabis remains in a legal limbo, as federal guidelines have not changed surrounding the legality of cannabis itself. It is still illegal on the federal level. In fact, the DEA classifies it as a Schedule I drug, alongside heroine and peyote, meaning it classifies it as having, "no currently accepted medical use and a high potential for abuse."

For banks this prevents a major challenge, as if they provide banking services or payments to cannabis businesses, they would be acting legally within state laws but illegally on the federal level.

"Banks must abide by both state and federal law. Therefore, offering banking services to state-authorized cannabis-related businesses in violation of federal law carries important risk to banks," the American Bankers Association stated in a blog.

Currently, the ABA is pushing for Congress to adopt regulations that provide better clarity and offer legal protections for banks to be able to transact with cannabis dispensaries without incurring potential consequences.

Due to this issue, cannabis dispensaries have to rely on cash for payments.

The ATM solution

With declining cash usage, cannabis dispensaries need to provide convenient access to cash for customers who often will not have enough on hand. As mentioned above, banks are unlikely to deploy their own ATMs in dispensaries due to legal risks. That's where the independent ATM deployer comes in.

ATM deployers are legitimate businesses and handle the regulatory, cash management and replenishment services that cannabis dispensaries can't handle. Relationships between independent ATM deployers and dispensaries are highly beneficial due to both providing cash access to customers and much higher transaction volumes for ATM deployers.

MBO Ventures estimates most dispensaries get between $2,500 to $10,000 per day in gross revenue, but this number can be a lot higher at busier dispensaries.

Lieberman Companies estimates "A standard ATM holding $20,000 in $20 bills might last several days at a typical location but could run empty within hours at a busy dispensary."

It further noted that, "the average ATM withdrawal at dispensaries runs 25-30% higher than conventional locations, reflecting both the cash-only nature of cannabis purchases and the tendency for customers to make larger, less frequent purchases."

This can vary depending on the dispensary, as medical only dispensaries tend to have more reliable patterns as customers come in at regular intervals for their prescription, whereas recreational dispensaries may see impulse purchases.

A note on cashless ATMs

Some dispensaries have adopted what are known as cashless ATMs as a way to circumnavigate regulations. With these machines, customers enter their debit cards and use the ATM like a normal withdrawal, but instead of cash being dispensed, the funds are sent to the dispensary in a traditional POS transaction.

However, there has been a crackdown by payment processors such as Visa, arguing that is a fraudulent transaction that tries to get around its standards of not allowing cannabis payments to keep in line with federal laws. Trulieve Cannabis Corp.based in Arizona was fined $700,000 by Visa for using this technique and is currently fighting the fines in court.

The bottom line

Until cannabis is legal at the federal level or further guidance is put in place for banks, cash will remain king at the dispensary and ATMs will continue to offer a critical service for customers.

Even if more legal guidelines are established, cash will likely to continue to be a critical payment option for cannabis dispensaries as many customers choose cash as a way to protect their privacy or to more carefully budget purchases.

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About Bradley Cooper

Bradley Cooper is an experienced editor for Connect Media. He has written across a wide range of beats, ranging from food to digital signage to banking, and is the current editor of ATM Marketplace and Food Truck Operator. His background is in information technology, advertising, and writing. When he’s not crafting a story, you can find him going for a run or spending time with his wife and three sons.

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