Mastercard, the second-largest payment-processing corporation worldwide, has delivered a striking blow to the rapidly growing U.S. cannabis industry. In a recent directive, the company instructed its associated financial institutions to discontinue allowing marijuana-related transactions on its debit cards.
This move represents a significant setback to an industry that already finds itself precariously positioned on the margins of the U.S. financial system.
Despite a number of U.S. states moving towards a more permissive stance on marijuana, sanctioning both its medicinal and recreational use, the plant and its derivatives remain illegal at a federal level. This reality has rendered many banks reluctant to offer services to cannabis companies, leaving the industry in a complex and challenging financial predicament.
In a statement issued on Wednesday, a spokesperson for Mastercard commented on the development, saying: “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 connects them to Mastercard to terminate the activity.”
The spokesperson further emphasized the company’s position, stating that “the federal government considers cannabis sales illegal, so these purchases are not allowed on our systems.”
Mastercard’s directive has drawn a swift reaction from industry figures. Brady Cobb, CEO of Sunburn Cannabis, expressed his concern over the impact of the decision on both the industry and the end consumer. “This move is another blow to the state-legal cannabis industry and patients/consumers who want to access this budding category,” said Cobb.
Darren Weiss, President of pot firm Verano, remains committed to advancing the industry’s cause in spite of Mastercard’s stance. “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 U.S.,” Weiss said.
This development comes at a time when discussions about the SAFE Banking Act – legislation that could fundamentally alter the cannabis industry’s relationship with banking services – are taking place in the U.S. Senate.
While the passage of this bill could represent a significant breakthrough for cannabis-related businesses, leading Republican Senator John Cornyn recently dismissed Senate Majority Leader Chuck Schumer’s plans to enact the bill as “wishful thinking.”
Mastercard’s decision to halt cannabis transactions on its debit cards, which was initially reported by Bloomberg News, has spotlighted the ongoing tension between state and federal laws regarding cannabis, and its ripple effects on both business operations and financial institutions.
As the U.S. cannabis industry continues to evolve, these complexities underscore the urgent need for a clear, unified legislative framework that can guide its future growth.
Marijuana, also known as cannabis, is a plant that people use for both recreational and medicinal purposes. The primary psychoactive compound in marijuana is delta-9-tetrahydrocannabinol (THC), which is responsible for the “high” associated with its use.
Recreational marijuana use is prevalent around the world, with users consuming it to experience a state of relaxation and euphoria. Some other effects include altered sensory perception, heightened mood, laughter, increased appetite, and more. However, it can also lead to negative side effects such as anxiety, panic, hallucinations, troubles with heart rhythms, dry mouth, and red eyes.
Medical marijuana is used to treat symptoms like pain, nausea, and appetite loss. It can be beneficial for people with conditions like cancer, AIDS, multiple sclerosis, and glaucoma. Some research suggests that cannabinoids might help with a number of other conditions, but more robust research is needed to understand the benefits and limitations.
While marijuana is often perceived as a safe drug, it does carry risks, particularly with heavy or long-term use. These can include mental health problems (like anxiety or depression), respiratory problems (if smoked), issues with cognition and memory, and in some cases, dependency. It can also have negative interactions with other drugs or medications. It’s important for anyone considering marijuana use to understand these risks and to discuss them with a healthcare provider.
Additionally, marijuana use by adolescents can have significant negative effects, including potential harm to cognitive development. It is also recommended that pregnant women avoid using marijuana, as it could potentially have harmful effects on the fetus.