Smoke ‘em if you've got cash — south of the border, anyway..That’s because at least one major US financial institution is effectively banning its customers from racking up legal weed purchases on debit cards to comply with federal laws..Mastercard announced on Wednesday that it had ordered banks that offer payment services to cannabis merchants and connect them to Mastercard “to terminate the activity,” it said in a statement.."The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems.”.It follows a similar move by Visa in 2021 involving cashless ATMs in pot shops. Earlier this year pot operators were forced to find a new payroll provider after Paychex stopped processing direct deposits for employees..Marijuana is legal for medical purposes in 38 states including 23 that allow recreational use. However, it remains illegal at the federal level, which means buyers are usually forced to pay cash..That in turn means dispensaries aren’t allowed to access the various banking systems at the risk of being charged with money laundering. This in turn has led to security problems at businesses that by necessity are required to pay all their bills in cash..Cashless ATM and PIN debit options subsequently gained popularity among dispensaries, offering customers a method to buy marijuana products without cash to make it more convenient for both parties. .Democrats in the US Senate have tried to change the law to allow legal cannabis companies to transact with financial institutions but the Republican-controlled House has vowed to defeat it..Earlier this month, top Republican Senator John Cornyn described the bill's passage as "wishful thinking.”.Although US President Joe Biden effectively decriminalized weed and granted pardons for millions of low level convictions, he has remained supportive of federal restrictions on its sale..Perhaps not surprising, the unwillingness to transact is fueling a drive to crypto currencies. Some observers say it's possible that Bitcoin might become the official currency of cannabis..Dutchie, a US point-of-sale hardware provider and E-commerce platform, unveiled a new payment processing service using Bitcoin and digital wallets to deposit, transact and receive funds. Customers can even buy insurance through the company..“This alternative solution is intended to allow you to continue processing without any disruption,” the company told its retail partners via e-mail..According to the Marijuana Policy Project, US states raked in a collective $15.16 billion in tax revenues from recreational cannabis sales in 2021, excluding revenue from medical marijuana..In Canada, where marijuana has been legal since 2018, customers can regularly pay by credit, debit or even email transfer at thousands of locations including grocery chains such as Calgary Co-Op..According to Statistics Canada, consumers spent about $4.5 billion on cannabis products in 2022.
