Marijuana remains legal for medical use in 38 of the 50 states in the US. It is also legal for adults over 21 years old to buy for recreational use in 23 states, including Washington DC and the entire US West Coast. But federally, the largely recreational drug remains illegal.
Mastercard said that it implemented the move after some shops were found to be accepting debit payments while a federal ban remained in place.
“As we were made aware of this matter, we quickly investigated it. In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connect them to Mastercard to terminate the activity,” Mastercard said in a statement on Wednesday.
“The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems,” the statement continued.
What does it mean?
Industry insiders have decried the move as a blow to the industry
Sunburn Cannabis CEO Brady Cobb said in a statement that “this move is another blow to the state-legal cannabis industry and patients/consumers who want to access this budding category.”
Pot firm Verano’s President, Darren Weiss, said “We will continue to advocate for cannabis reform in Washington through further dialogue with elected officials and stakeholders to advance conversations supporting the growth of safe, legal cannabis across the US.”
How do customers pay for marijuana?
Customers are forced to pay for marijuana in cash in 38 states where marijuana remains legal.
Earlier this month, Republican Senator John Cornyn said Majority Leader Chuck Schumer’s plan to pass a marijuana banking bill was “wishful thinking”.
The SAFE Banking Act is a significant legislation that would make it easier for the cannabis industry to access banking services.
Many US states now make significant revenues through marijuana sales.
California now regularly rakes in more than $1 billion per year in marijuana tax revenue.
Many other states make hundreds of millions of dollars per year.
The states in the US reported cumulative $15.16 billion in tax revenue from recreational cannabis sales in 2022, excluding the revenue from medical marijuana, according to the Marijuana Policy Project.
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