Mastercard bans cannabis purchases on debit cards.
Mastercard bans cannabis purchases on debit cards.
Mastercard puts a brake on marijuana transactions, dealing a blow to the industry
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In a surprising move, Mastercard has instructed financial institutions to stop allowing marijuana transactions on its debit cards, dealing a blow to an industry that is already operating on the fringes of the financial system in the United States. While marijuana has been legalized for medicinal and recreational use in several states, it remains illegal at the federal level, making it difficult for cannabis businesses to access traditional banking services.
Most banks in the country have been hesitant to service cannabis companies due to the inconsistent legal landscape surrounding marijuana. This has resulted in a situation where marijuana-related businesses often operate on a cash-only basis, creating security concerns and hindering their ability to participate fully in the financial system.
“As we were made aware of this matter, we quickly investigated it. In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connects them to Mastercard to terminate the activity,” a spokesperson for Mastercard said.
While the move may come as a disappointment to the state-legal cannabis industry and the patients and consumers who rely on their products, it highlights the ongoing challenges and legal complexities faced by the marijuana sector. The federal government still views cannabis sales as illegal, and as such, Mastercard is aligning its policies with the federal standpoint.
Brady Cobb, the CEO of Sunburn Cannabis, expressed his disappointment, stating that “this move is another blow to the state-legal cannabis industry and patients/consumers who want to access this budding category.” Cobb’s sentiments are echoed by Darren Weiss, the President of pot firm Verano, who emphasized the importance of advocating for cannabis reform in Washington and engaging in dialogue with elected officials and stakeholders to support the growth of legal cannabis across the United States.
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The decision from Mastercard comes at a critical time when the industry is eagerly waiting for legislation that would make it easier for cannabis businesses to access banking services. The SAFE Banking Act, a bill proposed by Majority Leader Chuck Schumer, aims to address the financial challenges facing the cannabis sector. However, the bill’s passage is uncertain, with Republican Senator John Cornyn recently dismissing it as “wishful thinking.”
Mastercard’s decision to halt marijuana transactions on its debit cards could further complicate the efforts of cannabis businesses to gain wider acceptance within the financial system. This setback highlights the urgent need for comprehensive cannabis reform at the federal level, as well as increased dialogue between industry stakeholders, elected officials, and financial institutions to find workable solutions.
Overall, while Mastercard’s decision may temporarily hinder the growth of the state-legal cannabis industry, it also underscores the importance of addressing the legal ambiguities surrounding marijuana and finding a way forward that ensures both the safety and accessibility of cannabis products for consumers across the United States.
