In a major setback for the cannabis industry in the US, Mastercard has instructed financial institutions to cease processing marijuana transactions on their debit cards. This move further isolates an already marginalized sector from the mainstream financial system.
Many banks refuse to provide services to cannabis companies due to the federal illegality of marijuana, despite its legalization in certain states for both medical and recreational purposes.
On Wednesday, a spokesperson for the company took swift action after being alerted to the issue. Following their internal policies, they promptly launched an investigation and directed the financial institutions responsible for facilitating payments for cannabis merchants to cease their activities connected to Mastercard.
The spokesperson also stated "The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems."
The CEO of Sunburn Cannabis, Brady Cobb, expressed concerns over the impact of this decision on the cannabis industry and those seeking access to legal cannabis saying, "This move is another blow to the state-legal cannabis industry and patients/consumers."
Darren Weiss, the President of Verano, emphasized the importance of ongoing discussions with elected officials and stakeholders to promote the growth of safe and legal cannabis in the United States.
Senator John Cornyn, a prominent Republican, has dismissed Senator Chuck Schumer's ambitious plan to pass a marijuana banking bill as mere wishful thinking. However, the proposed SAFE Banking Act holds significant importance as it aims to facilitate the access of banking services for the cannabis industry.
Mastercard's decision to halt marijuana transactions on its network underscores the persisting challenges facing the cannabis industry in navigating a labyrinthine regulatory environment. Despite the growing acceptance and legalization of marijuana in numerous states, federal laws continue to create significant barriers. This dissonance between state and federal laws underscores the need for a comprehensive national policy on cannabis that recognizes its economic potential and addresses the regulatory complexities.
As the industry awaits progress on the SAFE Banking Act, the road to mainstream financial acceptance remains a daunting one for cannabis businesses, underscoring the urgent need for legislative action.