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It’s time to normalize cannabis payments | Banking Dive

It’s time to normalize cannabis payments | Banking Dive

Attitudes toward cannabis are undergoing a significant transformation. Today, 23 states have legalized adult-use cannabis, with 38 states and the District of Columbia allowing the medical use of cannabis products. There is also a steady rise in public support for cannabis legalization, with 68% of adults saying marijuana should be legal.

Meanwhile, the legal cannabis industry is booming, providing jobs, tax revenue and entrepreneurial opportunities in communities around the country. According to some estimates, the U.S. cannabis industry could reach $71 billion in legal cannabis sales in 2030

However, a key obstacle persists – the lack of consistent and convenient debit and credit card payment options for licensed cannabis operators. 

In the latest blow to cannabis operators and their customers, Mastercard recently issued cease and desist orders instructing “financial institutions that offer payment services to cannabis merchants and connect them to Mastercard to terminate the activity,” adding that its rules “require our customers to conduct lawful activity where they are licensed to use our brands.” This action followed a December 2021 crackdown by Visa on the use of cashless ATMs for cannabis purchases.

At a time when hundreds of national, regional and community banks and credit unions across the country are providing financial services to licensed cannabis businesses, operating within the guidelines offered by FinCEN and passing their regulatory exams, why can’t the card brands do the same? We are nearly 10 years into adult-use legalization and the time has come for the major card brands to change their stance.

Here are four ways debit and credit card payments will benefit the card brands and normalize the cannabis industry overall.

Enhanced Regulatory Oversight. One of the primary concerns surrounding the cannabis industry is the potential for illicit activities, such as money laundering or the diversion of legal cannabis to the black market. Payment card systems offer enhanced transparency, making it easier for regulators to track and trace transactions. By supporting cannabis payments, card brands can help regulatory authorities ensure compliance within the cannabis market. This aligns with the broader objective of creating a well-regulated, legitimate and accountable cannabis industry. 

Improved Safety. A significant challenge in the cannabis industry is the reliance on cash transactions. Because of the ongoing conflict between state and federal law, many cannabis dispensaries, cultivators and distributors have little choice but to operate as cash-only businesses. Cash-only operations create security concerns for both businesses and consumers, increase the risk of theft and make it challenging for regulatory bodies to track and trace transactions effectively. Supporting card payments can mitigate these issues, making the industry safer, more transparent and more accessible. 

Economic Advantages. Supporting cannabis payments isn’t just about keeping up with the times; it also makes good economic sense for card brands. By facilitating payments, card brands can tap into a lucrative and expanding market. Additionally, card companies stand to benefit from transaction fees, processing fees and increased usage of their cards. This can lead to a boost in their revenue streams, especially if they are the first to embrace cannabis payments on a large scale. 

Customer Convenience. Customers want to use their cards to purchase cannabis where it’s legal. The message the card brands are sending to their customers is that you cannot use your own money to buy a legal product. Card payments provide customers with a familiar and secure payment method, which will enhance their overall shopping experience and deepen their loyalty to the card brand. 

The changing landscape of cannabis legalization, evolving public attitudes and the immense economic potential of the cannabis industry present a compelling case for card brands to support cannabis payments. Other forms of traditional payments such as wires, ACH and checks are clearing and being processed on national systems at staggering volumes. 

Offering debit and credit card payment services to licensed cannabis businesses fosters an environment of transparency and accountability, aligns with the values of modern commerce and demonstrates a commitment to supporting all legal enterprises. It’s time for card brands to embrace cannabis payments as a strategic move that benefits them and the industry. 

To learn more and sign the letter to card brands, please visit

This content was originally published here.

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