Deep Dive: How Digital Identity Solutions Can Enable Age-Restricted Vending Machines to Satisfy Verification Requirements

Unattended retail solutions have been around for decades, with vending machines carrying sodas and snacks being rolled out as cost-effective solutions to sell food and sundries without forcing merchants to purchase retail property or employ full-time employees. These machines have branched out in recent years, with many now selling expensive items like electronics and medical supplies or even offering devices that can create, bake and sell whole pizzas to order.

Vending machines have made significant headway in the cannabis industry, especially in the last five years as more states legalize the product. States that have legalized marijuana have instituted age limits on its purchase, regulating and restricting its sale much as they do alcohol or tobacco. Many cannabis entrepreneurs would undoubtedly appreciate the ability to sell their products without providing an entire storefront, but age limits have made this tough to manage.

The following Deep Dive explores the rise of unattended retail solutions concerning age-restricted industries such as cannabis and alcohol. It also examines how sellers leverage digital identity solutions to ensure their customers are of legal age to purchase restricted items without requiring human interaction during each purchase.

The Rise of Age-Restricted Vending Machines

Legal cannabis sales have flourished in the past 18 months as social distancing and stay-at-home orders shut down other forms of entertainment. Marijuana is legal for medical use in 33 states and recreational use in 18, representing a massive burgeoning industry.

Many states, including California, Colorado, Illinois, Michigan and Vermont, designated cannabis providers as essential businesses, allowing dispensaries to remain open even as restaurants and retailers shut down or heavily modified their operations. Colorado alone saw $2.2 billion in marijuana sales in 2020, a record for the state, including a monthly high of $200 million in July.

Many businesses in the legal marijuana field have been exploring options that would allow them to sell their products via automated retail, eliminating the need for brick-and-mortar storefronts and staff to serve customers.

California-based GreenSTOP launched a prototype marijuana vending machine in 2018 and opened two kiosks in 2020, each with the ability to serve four customers simultaneously. Meanwhile, Massachusetts-based unattended retail solution provider Anna is expected to deliver its first cannabis kiosks to dispensaries this year.

Most of these vending machines still have an inherent limitation: they must be installed within the dispensaries, as there are age restrictions on legal marijuana. Dispensary employees are thus required to conduct ID checks at the door to avoid illegally selling cannabis to minors, meaning most machines must be located at brick-and-mortar dispensary locations, which mitigates one of their main potential draws.

Cannabis entrepreneurs who wish to place these machines outside their dispensaries must have some method to authenticate customers’ ages before they can make a purchase. Fortunately, there are several digital identity solutions to help them do so.

Digital Identity Solutions for Age-Restricted Automated Retail

Any marijuana vending machine manufacturer must require age verification to operate a machine outside of a dispensary. Online alcohol vendors, which also provide age-restricted products, typically rely on self-reporting before shipping products to customers, but they often require ID verification at recipients’ doors before shipments are delivered.

This can often prove ineffective, with 54% of age-restricted websites in the U.K. failing to keep minors out, for example. Marijuana vending machines skip the human verification step entirely and must offer some way to verify users’ identities independently.

Unattended cannabis retail provider American Green is leveraging one such solution. The company recently partnered with digital identification provider Jumio to verify customers’ government-issued IDs on its vending machines. Users scan their drivers’ licenses using their phones, and Jumio’s software then matches the pictures on their cards with facial biometric scans to ensure that users’ faces match with the photos on their licenses.

The ID-facial biometric data is then linked to users’ fingerprints, which is all the machine requires for repeat purchases, rather than requiring the facial scan and ID verification all over again.

Systems like these could prove handy not only for marijuana vending machines, but also for the sale of other age-restricted items like tobacco or alcohol. This, in turn, could mean huge savings for vendors and manufacturers by enabling them to sell directly to customers without establishing brick-and-mortar locations.