LAS VEGAS — It's been 23 years since California became the first state to legalize medical marijuana, and five years since Colorado and Washington became the first to make recreational pot legal. There's still a big problem. Cash. A lot of it. Cash isn't just king in cannabis, it's almost all there is. "It's a huge issue," said Bob Groesbeck, co-CEO of Planet 13, a massive marijuana superstore in Las Vegas doing over $5 million a month in sales. Groesbeck has managed to bring in some credit card capabilities to his store, without revealing details. "I'd still say it's probably about 60% cash." Customers — especially millennials— don't like using cash, and cash sitting in a back office isn't secure. However, major banks and credit card companies still won't touch cannabis. It remains a Schedule I drug, illegal at the federal level. This creates a gap that Keith McCarty hopes to cash in on.

Wayv founder Keith McCarthy Source: Wayv

McCarty is CEO of Wayv (pronounced wave). The year-old company provides an Amazon-like platform for legal marijuana retailers in California to do online sales and next day delivery. "We have well over 90 percent of the licensed retailers already ordering through Wayv, and more than 80 leading brands within the state of California," McCarty said. Monthly revenues are in the low millions of dollars.

Wayv Payments

Now he's introducing Wayv Payments — a digital B2B payment system that allows retailers, growers, manufacturers and distributors to pay each other in a timely manner and without cash. McCarty calls it the first time a marijuana marketplace and logistics platform has been combined with a payment system. "One place to shop, one delivery, and one payment," he said. McCarty and his partners, who include PayPal founding COO David Sacks, put in $5 million to launch Wayv, but this is not their first venture. McCarty helped create Eaze, a popular on-demand cannabis delivery business, and before that, he was a top executive at Yammer, a sort of Facebook for internal office communications. Yammer was sold to Microsoft in 2012 for $1.2 billion.

WAVY CEO & founder Keith McCarty and employees at an industry conference. Source: Wayv

Wayv set up offices in Venice, California, in the area called Silicon Beach. The ocean is a block away (hence, the name "Wayv"). The company is not yet profitable. Wayv is using fintech created by an Arizona company called Hypur, which has spent an estimated $30 million to develop digital payment technology for the cannabis industry. It has built relationships with financial institutions interested in the sector, and Hypur provides the necessary due diligence for regulatory compliance. "I believe we've got roughly 24 banks in the state legal cannabis industry [working with us]," said Tyler Beuerlein, a former professional baseball player who is now Hypur's chief revenue officer. He projects most digital payments in cannabis will use Hypur technology by the end of 2020. "Keep in mind, we firmly believe there are less than 40 in the entire country banking this industry to scale. So over half of those are our clients," he said.

Silicon Beach startup WAYV employees at an industry conference. Source: Wayv

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