Teaser: Cash Vs Card Impact

Aubrey Amatelli 0:00

When you go from cash to debit, you're growing about 34% your average ticket. And then when you add credit, you're growing another 22 to 27%.

Event Announcement: 3rd Annual High Spirits Morning Mixer at MJBiz

Sarah Falvo 0:16

Hey everybody, welcome to episode 110 of High Spirits. I'm Sarah Falvo, Director of Marketing at Vertosa. Don't worry, Ben and Anna Ray will be joining us shortly. They've asked me to hop on the mic to share some exciting news about the event we've all been waiting for. Our third annual High Spirits Morning Mixer at MJ Viz. This event is our way of saying thank you to our incredible community, our listeners, podcast guests, cannabis colleagues, and friends. We can't wait to celebrate with you. So mark your calendars for Thursday, December 4th. It's the perfect way to kick off your MJ Viz day, catching up with friends, talking shop, and sipping on some coffee and maybe a cannabis beverage or four in our beautiful bungalow suite at the Cosmopolitan. Keep an eye out for more event details soon, and trust me, this is one you won't want to miss. And without further ado, Anna Ray and Ben.

Ben Larson 1:15

Amazing. All right. I have a replacement. This is great.

AnnaRae Grabstein 1:21

Eric, this is so cool. I'm so glad that you could join us this morning for this intro. I feel so grateful.

Sarah Falvo 1:28

Thank you for having me. I've been a fan since day one. Obviously, you guys know.

AnnaRae Grabstein 1:34

Well, you've been planning the morning mixer since long before you got snagged by Ben and hired by Virtosa. And um, you've done such an incredible job. And it's been so fun to get to build this community event with you over the years. You've been the mastermind behind all of the perfect details. So thank you.

Ben Larson 1:53

Yeah, I think the the biggest feedback we got from the last two years was that we wanted more space and maybe a little bit of airflow. So we got both, and we're really excited about that.

Sarah Falvo 2:04

Yes, we have the coolest bungalow suite at the Cosmo, few different levels, some outdoor space. So, yes, we we listened to the community and uh we adjusted. So it's a good problem to have.

Ben Larson 2:19

Awesome.

AnnaRae Grabstein 2:20

Totally. I I think it's so strange how in Vegas almost no hotel lets you open a window anywhere. It's like, and it's common in lots of hotels, especially high-rises, but we

Hosts Banter And Q4 Planning

AnnaRae Grabstein 2:31

had to go to the Cosmo this year so we could get some fresh air at our party. Like, come on, we all deserve some fresh air, right? Uh, I'm super excited. Me too.

Ben Larson 2:41

Awesome. Well, Sarah, thank you so much. Uh, you did a great job. And yeah, you can sub in anytime.

Sarah Falvo 2:48

Absolutely. I always love chatting with you on or off camera, the both of you. So thank you very much for letting me come and talk about our fun event. And I'll talk to you guys later.

Ben Larson 2:58

All right, see ya.

Sarah Falvo 2:58

Bye, Sarah.

Ben Larson 3:00

Alrighty, on with the show, as they say. And Ray, how's your week going?

AnnaRae Grabstein 3:04

My week's been great. You know, I I had to go back this morning, actually, because I have just been doing a ton of 2026 planning with all my clients, and I'm just in this mode. And this morning I was like, I read something that Ben posted on LinkedIn over the weekend, and I feel like it's really speaking to what I'm feeling in the world right now. And like deep in a very long rant of yours. Not that maybe not a rant, I think you call it a weekend musing or something. Oh yes, oh yes.

Ben Larson 3:33

There's usually spin up when I'm like at the gym and like all the juices are flowing, and I'm like, I just gotta get stuff out.

AnnaRae Grabstein 3:38

And so well, deep deep in there, like towards the bottom, you said dream boldly, reverse engineer relentlessly, and welcome the friction. And it's like completely sums up where I'm at in my world right now. I'm just in this, like, think about everything that could be, but then also like truly think about the mechanics of how you get there. And um, it's like a crazy brain exercise time. I feel like I'm just I'm just in the brain exercise season and it feels really good. And I'm excited to get to be working on kind of execution related to visioning in all kinds of ways.

Ben Larson 4:16

So I love that for you. It is it is such it, it is such a fun space to be in where you truly just allow yourself to dream about what the future looks like. And this is what makes great entrepreneurs, right? Like a great entrepreneur sees a future that maybe other people can't see so clearly, and then they reverse engineer it, or they build a great team that can help them reverse engineer it. And of course, those plans are usually long and bold, and they change. So the friction is an important part because pivots happen, feedback happens, people way smarter than you come along and they give you new intel. It's just this constant effort of listening, re-engineering, but always believing that you do understand where the the future is going to be. And it's intoxicating for people to experience that. Like when you're so sold on a vision of the future, like people want to be a part of that and they want to help you build it.

AnnaRae Grabstein 5:09

And this concept of adding friction to it, like how do we actually get over disagreement is actually part of the hardest part because dreaming is easy to get people in line on a vision, and then you go through and like you said, reverse engineer relentlessly. But then figuring out how to let people say, like, I don't really disagree with that plane, and here's another way to look at it, is is part of part of I think the biggest challenge of like really good planning. So anyway, yeah, great. I loved what you said. I'm glad you put it out there. I always I always use this kind of this concept of can you prove it in the spreadsheet? That's the way that I always use like this reverse engineering concept is like, all right, let's go with our gut, let's go with our heart, let's let's follow our dreams. And now can you figure out how you're gonna follow it on a spreadsheet? Can you prove it with assumptions? Can you show how the business model is gonna work out? Um, and it's the season for that. Q4, folks, if you're not doing it, you're falling behind. That's all you gotta say.

Ben Larson 6:14

Oh man, yeah, neck deep. It is it is hard. I just gotta say, I think we talked about this last week, but it is hard to keep the train on the rails and start planning for the next year. It's it's just a lot of work. Q4, I don't know if it's just our industry or if it's just always in every industry, but Q4 is intense. Like the number of conferences, business getting done. I think people are trying to get their entire quarter done before you know, before December hits.

AnnaRae Grabstein 6:41

You want to close out with a bang, also. It's true. It's like end strong. Well, how are you doing?

Ben Larson 6:46

I'm good. I'm good. I've uh what have

Medical Market And Normalization

Ben Larson 6:49

I been doing? I was recovering from last week. My voice was much deeper last week on the podcast, so that was evident of the fun that we had in Vegas. But just been trying to get through this. I'll be in Denver later this week for SCC, which is a conference dedicated to the medical side of cannabis, uh, which I think is a very important side that doesn't always get spoken to. One of the big unfortunate byproducts of this adult use movement and and like the normalization of cannabis is that everything went towards the recreational space, all the branding, all that kind of stuff. And feel like we kind of left the medical movement in the dust. And so I really like to keep my feet there and really understand how we might heal people with the plant.

AnnaRae Grabstein 7:32

Super important. It's certainly where we all came from. I think it happened by accident, to be honest, is that it was really like market forces and dynamics that landed us where we are in this recreational space. So going back to what we were talking about about proving it with the spreadsheet, I think that that's that's really what the medical space and the therapeutic side of cannabis needs to do is to figure out how to create viable market opportunity to really serve the patients that we know are out there. But where are they? What's the channel? Yeah, excited to hear about that. So cool.

Ben Larson 8:03

Yeah. We recognize really early on with the ingredients that we create that there were many applications to it. A well-designed animal motion could be very much be a medicine, like a medical delivery, right? But the commercial ingredient side was what was going to drive and propel the business forward and normalize the plant so we could get to a place where doctors across the country were willing to make recommendations for cannabis. And so it is this feedback loop that we've been anticipating over the last seven years, at least that we've been running Virtosa. And I do think we're getting to a place now where there's just a lot more acceptance from the medical community about alternative medicines. And I'm I'm really excited for this next phase of medicine. Um, some people, like you know, Dr. Peter Atia, like Medicine 3.0, being really more thoughtful about what we're putting in our bodies.

AnnaRae Grabstein 8:57

I love it. And and it's also relevant as it relates to potentially a rescheduling of cannabis to schedule three and what that could mean for kind of unlocking medical opportunity more broadly. Um, and the general movement of biohacking our lives, which I'm all for. So amen. I want to be as healthy as possible. Um, whatever, whatever it takes.

Ben Larson 9:21

Like Steinholding competitions.

AnnaRae Grabstein 9:25

Um, let's jump in. I think we've got a really interesting entrepreneur to bring on and talk to us today.

Guest Intro: Aubrey From PayRio

AnnaRae Grabstein 9:31

Aubrey Amatelli is the founder and CEO of Pay Rio, a payments provider exclusively focused on cannabis and alternative medicine. Audrey's career started at JP Morgan in their merchant services group. And over a decade she rose to the executive director, commercial banker, specializing in tech and disruptive commerce in Silicon Valley. Aubrey currently serves on the NCIA Banking and Financial Services Committee. And she's also a single mother of three who successfully led Pey Rio to profitability in under a year while self-funding the business herself. So really cool story and really interesting business to shed some light on things that people don't often talk about. We've never talked about payments. So welcome, Aubrey. Stoked to have you here.

Aubrey Amatelli 10:13

Hi, so excited to be here. Yeah.

AnnaRae Grabstein 10:16

So, Aubrey, I hear you are on the road today, calling in from the Central Coast, somewhere beautiful.

Aubrey Amatelli 10:23

I am very rare occasion for me to be outside of the office, as I was mentioning earlier, but I am on the road looking at the ocean in Santa Barbara. So thank goodness for Starlink up ahead. But I am, yes, happy to be here and excited to be able to work on the road and talk to you all today.

Ben Larson 10:41

Anna Ray, she's living your your dream. She has the van, she has the Starlink, she's out on the road.

AnnaRae Grabstein 10:47

I know. Yeah.

Ben Larson 10:48

What are you waiting for? Why are you still tuning in from home?

AnnaRae Grabstein 10:53

I will be recording podcasts in my van very shortly. Don't worry. There will be one for the end of the year, I promise.

Aubrey Amatelli 11:02

I have to admit, it was nice looking out the window uh this morning and seeing dolphins kind of, you know, going in the ocean. It was it was beautiful. So uh very thankful. I think COVID did a lot for us, right? Being able to uh have the opportunity to get outside of the office and and uh you know explore this beautiful state. California is beautiful. I

Why Cannabis Payments Are Broken

Aubrey Amatelli 11:24

love that.

AnnaRae Grabstein 11:24

Well, let's jump in and talk about cannabis payments, which to many of us who have worked on the retail side or have tried to secure payment processing feels very broken and highly complicated. And we read all these headlines about rescheduling and banking reform, but those things aren't happening. The payment rails are shaky. It seems like they always have been. Like, what is the deal? Why is payment processing such a mess?

Aubrey Amatelli 11:52

Oh my gosh. So it's interesting. Coming into the cannabis payment industry, I, you know, launching Payrio three years ago, I didn't realize how shaky it would be, right? I'm thinking this is gonna be easy or not easy, but you know, I can figure this out. You know, I've I spent over a decade at JP Morgan, I know all the regulations and payments, uh, but coming in here, you you learn a lot, right? And the biggest thing is that uh, you know, cannabis is federally illegal and pay, you know, Visa and MasterCard follow what the federal government says. So they don't support, you know, they are as a payment company our governing body. So if cannabis is federally legal, Visa and MasterCard don't support the payments. So what we have to do as payment processors are is find unique ways to process payments that aren't going directly through the Visa and MasterCard Rails. Um, and that's why it's shaky because it's very hard to find payment solutions that aren't you know going directly through the rails. You know, Square is a you know normalizing payment, Square is a normal payment processor, Ad and Stripe, those are the big names that have come out recently. No one really talked about payments back when I was at JP Morgan, but now you see billboards of Stripe, you see Adian, you know, doing Super Bowl commercials. So people know what payments are today. Uh but you know, from a Canvas payment standpoint, the industry has never been able to process payments in a normal way. They're still infants when it comes to that. And so we're, you know, find unique ways to do that through the ATM rails, through wallet technology, um, and even as Ben and I were talking earlier, dabbling and and starting into looking at cryptocurrencies.

Ben Larson 13:30

But when I first entered the industry, I was evaluating a lot of companies, payments being one of them. And one of the first filters that we applied to a lot of companies was like, is this something that will just be cannibalized as soon as like the gates fall? Right. As soon as there's legalization or or something like that. The the most common one was like a social platform. It's like, oh, we're the Facebook for for cannabis. And like, isn't that just Facebook? Now that was before we realized that they would let you build up your accounts and then they would shut you down overnight. So maybe there was some some relevance there. But with payments, it's seeming like it's it's on charting a different course. And and I say that because I've learned over time payments is different than banking. So, like, even if a bank is willing to bank you, that doesn't necessarily mean that payments is going to be stable. And so, like, how should we think about the longevity of Pay Rio as we kind of navigate these these things on the horizon, like safe banking or like schedule three? Like, how does that change our our world as as entrepreneurs in the space?

Aubrey Amatelli 14:36

So the Safe Banking Act and Schedule Three would be amazing for you know for the cannabis industry, but they won't change the payment landscape because it still doesn't mean that cannabis is considered federally legal. And so my world, you know, the payment world won't change. Of course, more banks would, you know, uh would accept cannabis companies and support them, but it still doesn't mean that Visa and MasterCard are going to accept payments through their rails. So our world doesn't change. But the future of Patrio, as you asked, when cannabis becomes federally legal, which I hope happens sometime soon, that is when Visa Master, you know, that's when the point of sale companies, you know, that's when payments will be can, you know, seen as normalized, and that's when payments will be integrated into the point of sale companies. That's the big part here. Point of sale company, a lot, every dispenser that we talk to asks, do you integrate

SAFE, Schedule III, And Reality

Aubrey Amatelli 15:35

to Duchy? Do you integrate to trees? When you go to a grocery store, right, you ring up your groceries are rung up, and then when the total amount is completed, then it shows up right on that terminal, right? And you just tap your card or slide your card and you you pay. In in cannabis, that is that's a luxury to have, but that doesn't happen very often, right? That's the integrated payment solution that every dispensary is looking for, but be but it's very hard to have because um because that there's no there's very volatile payments, right? And so once cannabis becomes federally legal, all of the point of sale solutions will be able to integrate payments. And from a payrio standpoint, our non-integrated solutions will eventually become obsolete. That portion of my business will.

AnnaRae Grabstein 17:13

And financial services groups and banks have to figure out how to pick up the cash and move it around. It's a lot. Do you think that the payments uh restrictions that cannabis companies face are creating an issue with safety and are causing like cannabis companies to use more cash than other companies do? And like what is, yeah, what are the ramifications?

Aubrey Amatelli 17:37

Absolutely. Absolutely. You know, we know there's not a dispensary who when we have we have credit and debit card terminals, we do have credit options, and every dispensary has to have two terminals on their counter just to be able to accept credit and debit card payments. So, yes, it it is forcing the dispensaries to have you know majority cash. I would say all of our customers have at least 50% of their transactions are cash. That's a lot of cash on hand. That's really dangerous. That's why there's so many break-ins to dispensaries. It's it that's why security guards are required, right, at every single dis at every, you know, at the uh opening of the store, right? At the door. Um, so I agree that it's really hindering the dispensaries from, you know, from a safety standpoint, but also from growth. We've done a lot of case studies from the average ticket uh growth when you go from cash to debit, you're growing about 34% your average ticket. We just did a recent case study from one of our dispensaries who was cash only, and then they added debit. They grew 34% in one month, their average ticket. That's um that was a it their average ticket grew about

Safety, Cash, And Ticket Growth

Aubrey Amatelli 18:50

$15 at this particular dispensary. And then when you add credit, you're growing another 22 to 27%. So it's also hindering the the amount of revenue this that each dispensary can can earn. Um, it's hindering the growth because the customers only have a certain amount of cash on hand. Um, and say they go to the back to the ATM, they might pull out $100 and then they go shopping, right? But when they get to the counter, the taxes are through the roof. And so they might pull take $100 worth of goods, but then they get to the counter and the taxes are what 30, 40%, and then they have to put, you know, goods back because they need to pay for the taxes. But if they had our terminal or a terminal at the front, then they'd be able to, you know, pay for more than the cash they had on hand. That makes sense. So it is really hindering the dispensaries in multiple ways having these uh payment regulations.

Ben Larson 19:44

That sounds like a sales executive's like dream is to have it's like, how would you like to have 22% more revenue? Um yeah. Are there are there other barriers to sales as far as like getting into these dispensaries? Are is there a backend limitation sometimes, whether it's like state to state or or or what's yeah, what's the biggest limiter for expanding your business into dispensaries?

Aubrey Amatelli 20:10

Well, I think we we talked about the beginning, it's just the volatility of payments, right? And it's finding solutions that are reliable. And when I started the company, I was just so bright-eyed, like, well, this payment solution follows all the funds flow, is you know, that has a proper MCC code. Uh there's a compliant funds flow. It's not breaking any of the Visa MasterCard rules, right? Every part of this transaction, every part of this technology is uh fully compliant. There's no way it could be shut down, right? There's no way the payment brands could come and say, this isn't, you know, you're you're um running these payments on our rails because it was a wallet technology very similar to Venmo. But lo and behold, a year and a half in, um, the solution was sunsetted or essentially shut down by Visa MasterCard. And we had to transition our clients to a new payment solution. So I think that's that's the hard part in this um in the payment world is trust from the dispensaries in terms of how long is this solution going to last. And and a lot of times, you know, the the the most trustworthy solution is cash or is ultimately debit. Um debit solutions, cashless ATM runs on those ATM rails. And that really is the foundational solution in payments right now. But where we really see the growth is credit. Um the younger generation loves to do the Apple Pay, the Google Pay, you know, the Tap to Pay. I don't know the last time I pulled out a card in my wallet or even cash, right? I love using my phone. And so it, you know, in in the end, um, you know, finding those unique payment solutions is is our goal, but um earning and earning the trust of the dispensaries is really the barrier in in the industry.

Ben Larson 21:57

It's actually that's been become problematic for me because I'll go days without seeing my wallet. Yeah, and I'll just end up somewhere. I'm

Volatility And Trust In Solutions

Ben Larson 22:05

like, it actually happened to me at the airport the other day. I was like, I don't have my ID on me.

AnnaRae Grabstein 22:10

It's it's so crazy because we talk a lot about normalization. And in this podcast, we've talked to people in all different parts of the industry. And and really, this concept of normalization and destigmatizing cannabis. I haven't really thought about how much payments and the environment of the way that we pay for products affects kind of ongoing stigma. But the reality is that the experience in a dispensary when it comes to paying for your transaction is so substantively different than the way that the rest of us are getting to use our phones to pay for things otherwise. And I think it surprises people a lot and it just reinforces like you're doing something wrong when you're in a dispensary because now all of the other ways that you're used to paying for things normally all of a sudden don't work and you have to do this other thing. And it just makes people feel like they're doing something wrong when they're not breaking any laws and it's totally legal to be there. It's just that we've got these restrictions that um are creating this environment that is just it occurs to me that it feels very unfair. Yeah, it is.

Aubrey Amatelli 23:20

And and the solutions that we've had to come out with are, you know, to keep the dispensaries safe and compliant, right? To not break those Visa and MasterCard rules and and to also keep them safe from fraud and chargebacks and you know, a lot of risks that it that they face to take credit cards are are insane. Like uh one of the solutions we have we have in the marketplace now that is really safe for our dispensaries requires a consumer to upload the a picture of their ID and do a facial scan recognition in order to make a payment for cannabis, right? To make a payment. And and consumers are doing it because they want to use their Amex. But you're right, Anna Ray, it's like that makes me feel a little like why do I have to do this just to buy my medicine? Right? Why do I have to, you know, uh upload a picture of my ID and do like a facial scan recognition to make sure those match just so that I can buy my medicine? It's very interesting.

AnnaRae Grabstein 24:20

Well, so we've been talking about the dispensary environment, and I think that you have insight into the difference between financial services and payment processing kind of across the cannabinoid space. So I want to dive into the difference

Stigma And The Checkout Experience

AnnaRae Grabstein 24:36

between regulated state legal adult use cannabis payment processing versus um hemp. And then even within the hemp reality, um, my understanding is that there's differences between CBD and Delta 9 and um and brick and mortar versus e-com. And there's there's been some really big news in in the hemp derived space. Like Target is now selling hemp beverages in Minnesota. And it got me thinking about like, well, how do Target's payment processors feel about this? So I'd love it if you could just crack open this whole concept of the difference between hemp versus cannabis processing and then help us understand the state of payment processing in the hemp space as well.

Aubrey Amatelli 25:22

Yes. So, you know, hemp is federally legal. And so hemp is essentially just considered a high-risk payment uh category, which we love, which I can, you know, go to, we have a handful of sponsoring banks who love the hemp, you know, hemp world, hemp CBD. We also can do, believe it or not, cannabis seeds, clones, psilocybin spores. So, you know, you can get very, very, very close to the can, you know, cannabis, but just like one step removed. And because it's considered federally legal, they don't have to face any of the regulations of cannabis. Uh, we do have to collect, for example, COAs on every single product to make sure, you know, that, you know, to evaluate and the COA has to live on that page uh of on the e-commerce site to make sure that, you know,

Hemp Vs Cannabis Processing

Aubrey Amatelli 26:17

it's gone through it's uh all of you know been tested, et cetera, to make sure it's uh been tested by the I I don't know exactly how it's tested on the COA side. I'm not on that technical side, but we collect that.

Ben Larson 26:29

So the bank has to have on it real has to collect that and have that.

Aubrey Amatelli 26:34

We have to collect all this, yeah, we have to collect all the COAs, have it on file, and we have to share it with the bank, right? So the bank really is ultimately sponsoring all the transactions. So as a payment processor, our underwriting team, we work with the banks, right? And they they're the sponsors of the transaction, so they want to make sure that they have all the COAs on file along with us so that it is actually below 0.3% THC. That's what they're looking for. That's the threshold there. So the hemp beverages in um in Minnesota in Target are below 0.3% THC. THCA, you know, or Delta 9, Delta 8, they still give you a little bit of a buzz, right? Like cannabis, but it's just not, but it's below 0.3% THC. So it is kind of that um a little bit of a loophole that came out a couple years ago, where a lot of the cannabis industry decided to, you know, you know, go from growing cannabis to turn their farms into THCA because it had less regulations and they could all sell it online, right? So it is a loophole. And as payment processors, we're able to support those um those industries uh and give them uh merchant accounts where they can sell their THCA, Delta 8, Delta 9 online with really, you know, a very low lift underwriting process and approval within you know five business days. And then boom, they have an e-commerce store and they're they're ready to go with with minimal um regulations and rules. There are certain states you can't send to, et cetera. Um, but we make sure that they know all of the rules and and we monitor their websites actually daily uh through different tools to make sure they're they're not um sending to different states that they're not allowed to to keep them protected as well.

Ben Larson 28:28

It is wild. I know it breaks a lot of brains that we're stuck in this role in in the dispensary model and in the in the regulated space with just like such a constrained system. And then because of these laws that were passed in the farm bill, that even without complete guidance from the other federal agencies, it is just federally legal and it's just happening. You mentioned the different you know, cannabinoid categories like CBD, Delta 9, um, TCA. Are there different limitations that have occurred for these different categories, or is it basically all just treated as hemp cannabinoids?

Aubrey Amatelli 29:06

Yes, there are different limitations for each category. So um I don't have them all memorized, but as the company comes in, depending on what they're selling, um, then we essentially give them or guide them through their limitations on where they can and can't sell or ship their product ultimately based on the Visa and MasterCard rules. So Visa and MasterCards set the rules. Um, and then we ensure that all of our customers abide by those rules and guidelines so that they don't essentially get in trouble or what's uh called put on the match list. A match list is kind of the naughty list, and if they're put on the match list, they're fined and they're no longer allowed to accept uh payments for the indefinite future as a legal entity or um essentially as an owner, they're Security numbers actually put on that list as well. So they don't want to get caught on that match list. Then we guide them through uh the proper rules to make sure that they are

Banks, Compliance, And Match List

Aubrey Amatelli 30:10

processing payments or selling the proper um, you know, processing payments correctly.

Ben Larson 30:15

So yeah, so VSAR MasterCard are interpreting these kind of shifting state to state laws that that are kind of constantly in motion. Uh exactly. Do you know if do they publish those publicly online for people to see uh just to see what they're doing? They do. Okay.

Aubrey Amatelli 30:30

Yeah. And and we we actually lean on the bank. So I I wish I could say our team was like constantly looking at all those uh rules and regulations, but we lean on our banks. Um ultimately we go through, you know, our bank sponsors, uh, we lean on them to when they do the underwriting, they sweep through the website, make sure everything uh looks up to par. And if it doesn't, uh they let us know, and then we work with our client to make sure their website and what they're you know, what they're doing is is right uh based on right on the regulations ultimately. But uh we lean on the bank and they have a compliance team that is constantly monitoring the rules and regulations so that all of their customers are up to date.

AnnaRae Grabstein 31:14

Bringing up banking, I think, is is worth talking about. You sit on the banking and financial services committee with NCIA, and and your company is sort of like a a collaborator with the banks, like sitting between the banks and and the cannabinoid businesses, be it on the hemp side or on the cannabis side. And we know that the industry has been pushing for the SAFE for Safer Banking Act for, I don't know, is it a decade? It's like forever, is what it feels like. And um, and I think that it would be interesting to hear some of your perspective on the banking environment. Like, how hard is it still for cannabis companies to get banking? Is it actually still hard? And what's the quality of banks that are available to cannabinoid companies today?

Aubrey Amatelli 32:03

There is a lot more options for banks, for the dispensaries. And and the the reason I know that is when we have new customers come in, we always have to collect uh their bank letter avoided check, right? So that we're able to deposit

State Of Banking Access

Aubrey Amatelli 32:17

their funds into their bank account once they come on board. And I'm seeing new bank names pop up um, you know, every week or every day, right? So there are more and more banks that are coming, uh, coming to our table, but none of them are larger, more streamlined banks. Um, and you know, I I think that the the banking, the banks that do support cannabis still, you know, are are newer, uh like they don't have the same UI or the same technology as a JP Morgan or a B of A or you know, uh uh, you know, they don't have the same UI like that we need. For example, Pay Rio, I when I launched the company, I was looking at Silicon Valley Bank or JP Morgan and I landed on Fresno First. I love Fresno First Bank, but I still am not able to do a Zell, right? I'm I have I'm very limited in my bank, what I'm able to do in the bank, banking side of the house, and it seems very archaic. I love the bank and the bankers, but I don't have the same tools that I think other businesses outside of cannabis have. So there's still a struggle with the uh with the dispensaries and in the banking world uh with much smaller banks uh today. Uh but it it there are more and more banks coming out of the woodworks that are supporting cannabis, which is great. Are you seeing B of A and and Chase support hemp businesses? Yes, yes, I am. Yeah. So the mainstream businesses are uh for the federally uh legal products, I am seeing the mainstream banks supporting those.

Ben Larson 33:49

Oh, interesting. I did meet someone from Chase at NBWA last week and actually have dinner with them tomorrow in the evening. So uh I'll update you guys on how that goes.

Aubrey Amatelli 33:59

There's a there's a fun fact. So in Canada, uh JP Morgan is one or JP Morgan is one of the largest payment processors for cannabis uh in Canada.

What Changes Next

Aubrey Amatelli 34:11

So I I learned that fun fact because it is federally legal in Canada. So, you know, I think that everyone's just kind of waiting until the federal legalization and the the big banks will will jump on board. It'll still be very high, you know, considered high risk. But I thought that was very interesting. Uh that in Canada, JP Morgan is a big supporter of of the cannabis market.

Ben Larson 34:34

So you've been at this for for some time now, and you you're watching this evolution, you're watching more banks and more services come in. We've been through multiple waves of safe banking, I think maybe 10 and also rescheduling and all that kind of stuff. I'm curious, as an entrepreneur in the space, as someone that's tracking this from your perspective, like what and when is like the next big shift? Like what is the next big win for for your segment of the industry?

Aubrey Amatelli 35:06

I don't foresee federal legalization coming anytime soon. I thought it was coming, you know, about a year ago. I was thinking it was coming soon, but I I do I do think we're quite a ways out. Um, but what Patrio, we still love to, you know, we still support dispensaries every single day, but a big shift of ours has been over to, you know, supporting the the federally legal market. So our e-commerce business has grown tremendously, supporting the hemp side of the house. We've really grown in that in that realm because uh believe it or not, cannabis payments has been, you know, very calm. There hasn't been a lot of uproar or shutdowns in cannabis payments over the last 12 uh plus months in terms of, you know, as I mentioned, debit is the foundational product of cannabis. It's been very solid and trustworthy. And so dispensaries are happy, happily processing. Uh credit card payments are still the nut to crack there. Uh, so we have solutions that uh we're bringing to the market, but uh dispense, those are credit card processing is a nice to have now. Uh when it used to be we really want to have that to grow our business. So credit card processing is a cherry on top. So I think the

Founder Journey And Motivation

Aubrey Amatelli 36:21

opportunity has really shifted into the hemp market and and uh growing, you know, growing that uh that market in the e-commerce side. Um we also, believe it or not, peptides uh has been a really fast-growing hot topic in payments recently uh because peptides were recently regulated by the federal government. So they used to be able to process payments normally, like any other industry, uh like hemp, um, but then they were regulated. And now only research peptides are allowed to run through the Visa MasterCard Rails. So a lot of B2C peptide companies were shut off by their payment processors and are looking for unique solutions in payments. And luckily, Payrio has alternative ways to process payments because we've learned them from cannabis. So peptides has been a really fast growing uh industry for us as well.

Ben Larson 37:15

Wow, that was not what I expected.

AnnaRae Grabstein 37:20

It's so interesting, the entrepreneur's journey, and you really are one. Um, and I think that it would be fun to talk about your journey of starting this payment solution in this high-risk space. I know that you are self-funded the company. Uh, you have celebrated publicly that you are profitable in under a year, woman-led company or a single mom of three. It's like, what what pushed you to take the leap and start Payrio?

Aubrey Amatelli 37:51

So I before I answer this question, Anna Ray, you know, I was just remembering uh you were one of the very first faces that I ever met uh after starting Pay Rio. So I just want to thank you for um just being that smiling face in that very first Canopaque meeting in San Francisco when I remember I started the company. I heard of a cannabis event in San Francisco, I had no clients, I, you know, barely I had this idea and barely a product, and I was so scared driving over the Bay Bridge from Danville going to that event in San Francisco, not knowing anybody. And you were there and we talked, and I am so thankful to be here, you know, over three years later, and thank you for you know supporting me this whole time, you know, this whole time. So I really appreciate you. I just wanted to, I was just thinking like you were one of the the first faces that I ever met in cannabis. So thank you for that. Um, but how did I start this? I you know, I I spent so much time at JP Morgan and I absolutely loved it, but I was getting the itch to leave after 10, 11 years. And growing up in the Silicon Valley, I feel like, you know, I wanted to get back into the startup world. Startups were always, you know, in my in my blood, and and my kids were older. So I took the leap of faith and um took an opportunity to be the chief revenue officer at a fintech um outside of JP Morgan and my the whole JP Morgan family was super supportive of me, uh, of me doing that. Um, that company uh was a great experience. It was a payment company as well, working in the accounting and law vertical. Um, but I was the only female in the entire C-suite and board at that company. And um, I learned that I had learned had a very valuable um education at JP Morgan and what I learned there was super valuable at a startup, right? I had a lot of great ideas from JP Morgan, and a lot of what I learned there I could bring into a small startup and really help it grow. Um, however, I also

Brand, Community, And Growth

Aubrey Amatelli 40:02

learned that um I also being the only female there, um, you know, I just didn't get treated the way I that I should have. Uh, and I didn't have very good experience with that CEO and ultimately um had to leave the company. Um, and at that time, I just knew that I wanted to start my own company that was really supportive of women in business, and I wanted to uh just be a female entrepreneur and show other women that they could do it too. And so that's why I started Pay Rio was that kind of out of that experience of um, you know, if I couldn't be the change at a company that was very male dominated, I thought maybe I could just be the change and do it myself. So that's why Pay Rio was started. Uh, we do employ a very large uh majority women, a lot of stay-at-home moms and stay-at-home parents, so that it can give them the opportunity to support their families as well. Um, and it's just been a wonderful experience so far uh and self-funded because I don't know, I just didn't know how to go out and get funding. And you know, all I knew was like I started it by doing hundreds of you know 100 cold calls a day, and that's really how I started the business, and it grew from there.

Ben Larson 41:17

Wow. So that's that's an incredible journey. And I'm I'm getting the sense that this is also infused into the branding. Pay Rio is known for its bright pink and bright blue, like we see you guys walking around conferences. Uh last week we had Uncle Arnie's on and we talked about their branding and how it was kind of swimming contra flow to to the standard in in that category. This also, I mean, Pay Rio is not what you would expect to see when looking at financial services companies. And so, can you talk a little bit about the motivation behind the brand and then also how it's resonated over the last few years as as you've built out the offering?

Aubrey Amatelli 41:56

Yeah, so I I wanted Pay Rio to be uh again more feminine and approachable as a payment company. I feel like payments aren't really talked about, not really exciting. So thank you for over listening, right? It's not a very exciting topic. I mean, I didn't care about what happened after I swipe my card. You know, I didn't care about those milliseconds, you know, from the time I swiped my card from an approval. But now I live and breathe those milliseconds. I talk about them all the day or all the time, every single day. Um, so I wanted Pey Rio to be very approachable and it's really just an extension of me. Uh, Rio is actually my daughter's name. So it's my youngest of three. That's her name. Uh, and I I like the bright pink, and the blue comes from water, right? Rio River, and uh and just wanted to to have a little bit of fun with the brand because it was just me at the start. So uh how could I have fun and and make it uh where people wanted to hopefully reach out and and work with us? Uh the pink and blue was just because I needed a hat to go to MJ BizCon. I needed some sort of swag to get to MJ BizCon three years ago uh where people would notice us. And then um, that first MJ Bizcon, we got a ton of

Parenting, Perception, And Acceptance

Aubrey Amatelli 43:14

comments on the hat and it just kind of stuck. So now it's a requirement. Every time we go out to a conference, we wear the pink and blue hats. But it's worked. Um, we really started from a grassroots standpoint going to local and regional and national events. Um, we are very involved in the community in in terms of cannabis. I'm really passionate about the plant. Um, I'm passionate about the community. Uh we're we're part of it all around the country, wherever our reps are, they are part of all the local events. And that's how we started is really from the grassroots standpoint. And and my goal was just word of mouth, um, treating our customers right. Hopefully they'll recommend us to the next. So from a marketing standpoint, our budget was those hats. Um, and then my and Chase, my part-time marketing guy, part-time sales guy. But ultimately, that's the maximum marketing we've done. And um, I just, you know, my goal is just to do really great work and treat our customers right and treat my employees right and and you know, organically grow from there. I love it.

Ben Larson 44:22

I love it.

AnnaRae Grabstein 44:23

It's awesome. You know, your your story reminds me of that, like within the pain and suffering that cannabis is because of all of the regulations and complexity of being federally illegal, it also presents opportunities for entrepreneurs. And I think that that's one of the things that Ben and I have loved so much about building in cannabis too, is that you know, if if cannabis had been federally legal since the beginning, there wouldn't have been an opportunity for you to start Payrio. It just would have been gobbled up by Square and any other like massive, huge company that's out there would have served the space. And so because of these terrible, messed up restrictions, it's like people that really have fight in their spirit and are willing to do something that very few other people will do, start businesses in this space and try to create something that matters. And that it's kind of like it's what keeps me coming back time and time again, is it's that rebel spirit of the cannabis entrepreneur. And and whether it's with like a grower or product manufacturer or a payment provider, like there's this thread that I see between us all, and I certainly see it in you and hearing the story. So it's it's just really cool to hear. Thank you.

Aubrey Amatelli 45:36

I know we all have fight, don't we? Right. And we're all fighting for the same same thing. And soon we'll we'll get there, right? But as an entrepreneur, it is a fight no matter what industry we are. But I am the plant just has so many gifts to give all of us, right? And that's why we we stick it out. Yeah.

Ben Larson 45:54

I so you mentioned your daughter and and the namesake of the company. Um curious just what this journey's been like as a mom of three children and and navigating space and kind of having that be a part of your personal brand. Like, what has that journey been like for you? Uh coming out of JP Morgan, something where it's like, oh, very, you know, very well respected, very, very straight laced to cannabis industry. Yeah, see, the perfect timing, perfect timing. They're coming for you.

Aubrey Amatelli 46:27

Yeah, I know, I know. You know, that that was very interesting. The coming out on LinkedIn was a big deal uh for me. It was like I was very nervous. Okay, you know, I'm I'm ready to come out on LinkedIn. The majority of, you know, 80% of my connections on LinkedIn have been a decade plus of my JP Morgan, you know, payments and all of my customers at JP Morgan, et cetera. How is that going to be when I'm saying I'm launching a cannabis payment company? Um, but I was excited, I was proud of what I was doing, and I was ready. Um, I went came out on LinkedIn and I had dozens and dozens of DMs from you know cheerleaders at JP Morgan and all my colleagues saying, I use this sleep gummy at night or I grow cannabis here or I make cookies, can you help me? And it was, I was so um, you know, I was so welcomed by my JP Morgan community. And, you know, I I was so scared, but it was it's actually this, I just been so accept it's been I've been so accepted uh since coming out. So it's you know, maybe I'm in a little bubble, maybe we're in a bubble in California, and and I'm I'm I'm grateful for that. But uh it has, I haven't really faced that many hardships. Um, you know, my kids are I don't my kids just talk about it as a medicine. Uh, you know, I've we have six plants, uh not the last summer, but a couple summers before. I've we've grown six plants since COVID, uh, you know, our regulated amount in the backyard just for fun. Uh, we have a garden with a bunch of other vegetables as well. Uh so it's been normalized with my with my kids as well. So um, yeah, everyone seems to be really

Last Call: Support Women In Cannabis

Aubrey Amatelli 48:12

happy and supportive. I think that, you know, every as a single mom, um, they this is the way I'm providing for my family and um, you know, and and providing for my employees and just creating opportunities and jobs. And so how can you not support that, if that makes sense?

Ben Larson 48:29

Man, I I you and Anna or A are living parallel lives, farmer, entrepreneur, banker, mother.

AnnaRae Grabstein 48:36

It's this funny thing. Like, I at school events and things, if I tell people that I'm in cannabis, I feel like it's this funny invitation that I'm not actually inviting, but that people think it's an invitation of like, oh, you're safe. Now I'm gonna tell you about all of my recreational recogies that I do on the weekends, I do with my friends. And I'm like, whoa, I do I do business strategy in cannabis. I'm not a drug dealer, but like, thank you.

Aubrey Amatelli 49:06

It's like they think you're a dispensary all the summer, you know?

AnnaRae Grabstein 49:10

Yeah, like product, a product reviewer and and kind of like a plug. And I'm like, nope, not the plug, but uh, but thanks so much for recognizing that I am an accepting person that is not going to judge you for what you choose to do on your off hours, right?

Aubrey Amatelli 49:26

Exactly.

AnnaRae Grabstein 49:29

I don't know. Does that happen to dads as well then at school when you tell people that you're in cannabis?

Ben Larson 49:34

Oh, yeah, yeah, yeah. I've I've gotten lots of positive feedback. I've been invited to raves, I've definitely been asked uh if I have a connect. So and generally the answer is yes.

Aubrey Amatelli 49:47

I mean, we we we we do, right?

AnnaRae Grabstein 49:50

Um amazing. Well, this has been so fun, Aubrey. I think that it's really it's it's been enlightening for me, honestly, to think about this part of the business in a way that we don't often. And I I think that it will probably benefit a lot of our listeners out there. Um and we're towards the end of the hour. So it's time for our

Host Takeaways And Closing

AnnaRae Grabstein 50:10

last call. And this is your chance to give a final message to our listeners, advice, a call to action, or a closing thought. So you let us know. What's your last call?

Aubrey Amatelli 50:18

My last call really, you know, that comes to mind right now is just the support of, you know, female entrepreneurs and women in cannabis. I don't know, that just came up to me, you know, um, just looking, you know, the way that you supported me uh since the beginning. Um, you know, it's a fight being a female entrepreneur and a female in business. Um, and there's so many amazing women out there pushing in the in the cannabis industry. Um, I know Leah Sherry does NORCAL Women in Cannabis. Um, but it just in general, like uh being a female founder and seeing other women in cannabis uh supporting their business, liking their posts, uh, working with women in cannabis, uh it's just another way to help lift us all up. Um and just recommend recommending women, I think is really important. Um it's just been a really big reason. It has been the reason why I started Pay Rio. Um I want other women to know that you know they can do it too. Um, that I I've done it, you know, and we can all do it too. And I and it it takes um it takes a village, but um it's really incredible to have women like you, Anna Ray. I know Jocelyn's another one who was there at that day, and and those are two you are two faces and two women who've been there um supporting me from the beginning, and I hope that I can be um an inspiration or a support to women in the future. So um I guess that's my closing thought is just to keep pushing and supporting women in cannabis because uh we we all are uh working really hard to make our way, and uh, there's a very small percentage of entrepreneurs in in technology in my space, but uh especially in in the cannabis space as well. Awesome.

AnnaRae Grabstein 52:05

So cool. Yes, transact with women. Um yes, please. Important. Hell yes. I love it.

Ben Larson 52:11

Support your women in weed. All right, yes, yes, Aubrey Amitelli, founder and CEO of Payrio. Thank you so much for spending the last hour with us. It was really great. I hope you enjoy the sunshine in Santa Barbara. A little bit jealous, but I'll let you be off the hook with it. All right, talk to you soon. Anna Ray, you're so influential. I love it. Such a badass.

AnnaRae Grabstein 52:38

Oh, that was really interesting. I like really thought about some things I hadn't in a little while. How about you?

Ben Larson 52:44

Absolutely, absolutely. I I take payments for granted and I spend a lot of time, you know, in the in the normal world at grocery stores and all that, and it it does uh catch you by surprise when you walk into the dispensary, especially one that isn't outfitted with the payment services. It's like, oh man, I have to go to the ATM. And again, I'm left looking for my wallet because it's probably left in the car or something, or at home even. And so it's a big hurdle. Those numbers are startling 22%.

AnnaRae Grabstein 53:11

Yeah, crazy.

Ben Larson 53:13

What do you think, folks? Tell us what you think. Engage, leave comments, share, follow, subscribe, do all the things. Thank you to our friends at Virtosa and Wolfmeyer, and our producer, Eric Rossetti. If you've enjoyed this episode, please drop us a review on Apple Podcasts, Spotify, or wherever you listen to your show. And finally, folks, stay curious, stay informed, and most importantly, keep your spirits high.