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Class action lawsuit takes aim at Kansas City Cannabis for cashless ATM fees

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June 25, 2026

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A class action lawsuit alleges Kansas City Cannabis Company, in Kansas City, Missouri, used cashless ATMs as point-of-sale terminals to disguise sales as ATM withdrawals, exposing customers to rounding and bank fees. The suit claims the practice violates card network rules and Missouri consumer protection law, according to a report by KCTV 5.

According to the petition, customers purchasing cannabis were charged in preset increments — for example, $55 for a $52 purchase — and sometimes received cash back as change. The transactions were allegedly coded as ATM disbursements rather than retail purchases, triggering ATM surcharges of roughly $2 to $4 and potential out-of-network bank fees that would not apply to standard debit transactions.

The lawsuit states major card networks prohibit cannabis sales because marijuana remains a federally prohibited Schedule I substance. It cites a Dec. 2, 2021, Visa compliance communication warning that POS devices miscoding purchases as ATM withdrawals violate Visa rules and may result in penalties. Mastercard issued similar guidance in July 2023, directing financial institutions to stop facilitating marijuana transactions, according to the petition.

The complaint alleges violations of the Missouri Merchandising Practices Act, negligent misrepresentation and unjust enrichment. Plaintiffs seek class certification, damages, restitution, injunctive relief barring use of cashless ATMs and corrective advertising.

A case management conference is scheduled for Oct. 19 at 9 a.m.