Are you looking to purchase marijuana from a dispensary? Well, don’t reach for your Mastercard just yet. Yesterday, Mastercard made an announcement that it will no longer allow marijuana purchases on its debit cards. This decision is a significant blow to the already financially marginalized marijuana industry in the US, as reported by Reuters. The reason behind this decision is that even though marijuana is legal for medical use in 38 states, recreational use in nearly two dozen states, and Washington DC, it still remains illegal at the federal level.
In a statement, a spokesperson for Mastercard said, “As soon as we learned about this issue, we conducted a thorough investigation. As per our policies, we instructed the financial institutions that provide payment services to cannabis merchants and connect them to Mastercard to terminate these transactions.” The Washington Post points out that some buyers and dispensaries had been exploiting a “loophole” that allowed them to use debit cards with PINs to make marijuana purchases. Bloomberg, who first reported this news, reveals that Mastercard sent cease-and-desist letters to financial firms last week. Visa has taken similar actions in the past but has not commented on Mastercard’s recent announcement, as mentioned in Forbes.
Tyler Beuerlein, from cannabis banking firm Safe Harbor Financial Services, told Bloomberg, “If PIN debit solutions are no longer available, people will have to resort to ACH or cash.” Those who support cashless purchases are highlighting the dangers of dispensaries storing large amounts of cash, making them potential targets for robbery and putting their employees at risk. The SAFE Banking Act, which is supported by Democrats, is currently being debated in Congress. This act aims to provide protections to banks that offer services to cannabis businesses that are legal in individual states. However, some Republicans are concerned that this bill could lead to money laundering. (Read more Mastercard stories.)
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