Mastercard Bars Cannabis Transactions on Debit Cards, Dealing a Blow to the Industry

NEW YORK-In a recent move, Mastercard (MA.N) has directed financial institutions to cease processing cannabis transactions on its debit cards, delivering a significant blow to an industry that has long struggled to gain a foothold within the U.S. financial system.

The cannabis sector in the United States has faced numerous hurdles, primarily due to its federal illegality, even as several states have legalized its use for medicinal and recreational purposes. The majority of banks have refrained from serving cannabis companies, leaving the industry on the fringes of the financial mainstream.

A spokesperson for Mastercard commented on the matter, stating that the company promptly investigated the issue and, in accordance with their policies, instructed financial institutions facilitating payment services for cannabis merchants to terminate such activities. The decision is rooted in the fact that federal law still deems cannabis sales illegal, effectively prohibiting these transactions within Mastercard’s systems.

Brady Cobb, CEO of Sunburn Cannabis, expressed disappointment, calling the move another setback for the state-legal cannabis industry and for patients and consumers seeking access to this burgeoning market.

Likewise, Darren Weiss, President of pot firm Verano (VRNO.CD), reaffirmed the industry’s commitment to advocate for cannabis reform in Washington. He emphasized their ongoing engagement with elected officials and stakeholders to promote dialogue supporting the safe and legal growth of the cannabis market throughout the country.

The discussion around cannabis banking legislation has been a contentious issue, with the introduction of the SAFE Banking Act aiming to facilitate access to banking services for the cannabis industry. However, Republican Senator John Cornyn recently dismissed the possibility of Majority Leader Chuck Schumer’s plan to pass the marijuana banking bill as “wishful thinking.”

The decision by Mastercard to halt cannabis transactions was initially reported by Bloomberg News, drawing attention to the ongoing challenges faced by the cannabis industry in its efforts to gain legitimacy within the broader financial system.

As the cannabis industry continues to grapple with federal prohibition, its players will undoubtedly seek alternative solutions and continued advocacy to advance their cause and promote further reform in the years to come.

Advertising: For the best payment solutions, book a call with HCN Financial we have the best rates for all your dispensary payments needs.