(CTN News) – Mastercard (MA.N), a major financial services company, has directed financial institutions to cease allowing marijuana transactions on its debit cards.
This decision is a significant setback to the already marginalized cannabis industry in the United States, where marijuana remains illegal at the federal level, despite being legalized for medicinal and recreational use in several states.
The move has elicited strong reactions from industry leaders and cannabis advocates, who view it as hindering the growth of the state-legal cannabis sector and restricting access for patients and consumers.
Mastercard’s Action and Rationale:
In response to an undisclosed matter, Mastercard conducted an investigation and decided to enforce its policies, instructing financial institutions that offer payment services to cannabis merchants to terminate their involvement in facilitating such transactions.
A Mastercard spokesperson clarified that since cannabis sales are still considered illegal by the federal government, the company does not permit these purchases on its systems. This decision aligns with federal law, despite the patchwork of state-level legalization.
Impact on the Marijuana Industry:
The U.S. cannabis industry has long struggled to gain access to traditional banking services due to federal prohibition, leaving many marijuana businesses cash-based and facing numerous financial challenges.
Mastercard’s recent directive further exacerbates the situation by limiting the avenues for legitimate financial transactions within the cannabis sector.
Industry leaders and advocates have expressed concerns that this move could hinder the growth and viability of state-legal cannabis businesses, hindering patients and consumers from accessing safe and regulated products.
Cannabis Advocacy Efforts:
In response to Mastercard’s decision and to address the banking challenges faced by the cannabis industry, advocates continue pushing for legislative reform.
The SAFE Banking Act, a crucial legislation, aims to facilitate easier access to banking services for cannabis businesses, providing a more stable and secure financial environment. However, its progress has faced obstacles, with some elected officials expressing reservations about its potential enactment.
Industry Leaders’ Reactions:
Brady Cobb, CEO of Sunburn Cannabis, expressed disappointment over Mastercard’s move, recognizing its negative impact on the industry and consumers seeking legal cannabis products.
Meanwhile, Verano’s President, Darren Weiss, emphasized the importance of continuing dialogues with elected officials and stakeholders in Washington to advocate for cannabis reform and support the growth of a legal and safe cannabis market nationwide.
Mastercard’s decision to halt marijuana transactions on its debit cards has significantly affected the state-legal cannabis industry in the United States. As marijuana remains illegal at the federal level, access to traditional banking services has been a longstanding issue for cannabis businesses.
The move by Mastercard further hampers the industry’s growth and poses challenges for patients and consumers seeking legitimate cannabis products. Advocacy efforts for the SAFE Banking Act and continued dialogue with lawmakers remain essential in advancing cannabis reform and fostering a thriving legal cannabis market.