Mastercard cracks down on pot purchases, leaving the industry with few payment options
For everything else, there’s Mastercard… everything but weed. Mastercard sent cease-and-desist letters to businesses that were accepting its debit cards as payment for cannabis products (credit cards were already mostly a no-go). Since cannabis is still illegal at the federal level, Mastercard said those swipes are not allowed (even in the 38 states where it is legal). Canna sellers had turned to PIN debit payments after Visa warned against using the cashless ATMs that had been used by many dispensaries.
No more swipes: Now canna consumers could be left with just two low-tech payment methods: ACH transfers (which require routing + account #s) and cash.
Stuck in legal limbo… Because marijuana is considered a Schedule I drug, lots of cannabis companies are underbanked (big banks don’t want to be associated), and it’s hard for them to raise capital and get loans. Proposals to open up financial services to canna companies have flopped so far. The legislation with the most oomph, the SAFE Banking Act, passed the House four years ago but is stuck in the Senate, where it faces bipartisan opposition.
Rolling out: The US cannabis market has been struggling to sell off a supply glut as theft and illegal dealers cut into its pot pie. Curaleaf, the biggest distributor in the States, pulled out of CA, CO, and OR this year, citing a lack of enforcement against the illegal market.
Dark forces thrive in gray areas… Cash reliance has made dispensaries hot targets for burglaries (dispensary burglaries doubled in the Golden State last year), and illegal markets have undermined legit ones by charging less. The US’s legal dilemma has made cannabis titans like Canadian Tilray (which reported strong earnings this week) hold off on plans to distribute THC products in the US. Still, nearly 9 in 10 Americans agree with Sean Paul to “Legalize It.”