Payments

Mastercard bans cannabis purchases

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August 2, 2023

Mastercard has officially banned its debit cards from being used to purchase cannabis at dispensaries. This is due to the fact cannabis is illegal on the federal level, despite its legality in many states, according to a report by 9 News.

"The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems," Mastercard said in a statement. "In accordance with our policies, we instructed the financial institutions that offer payments services to cannabis merchants and connects them to Mastercard to terminate the activity. Our rules require our customers to conduct lawful activity where they are licensed to use our brands."

Although the reaction by the cannabis industry has been negative due to a removal of another payment method, some in the industry see a silver lining.

An article on Cannabis.net points out this will place safety front and center, since dispensaries will have to handle large quantities of cash. As a result, there will be legislative pressure on Congress to take action on cannabis federal laws, especially considering other avenues of payments have been shut down as well: such as cashless ATMs.

The article argued this could be a move by Mastercard to force the government to take action to fully legalize this industry, which is close to $500 billion in value.