August 2nd 2023.
Mastercard has recently taken a stance on U.S. cannabis industry by prohibiting their debit cardholders from placing any transactions to purchase marijuana. This move has understandably caused some disruption in the industry, and has put a damper on progress being made to gain legal recognition by U.S. banks and financial corporations.
A spokesperson for the company spoke to Reuters, and shared how they had “become aware” of its purchase availability and quickly moved to put a stop to it. They stated in a statement, “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 federal government considers cannabis sales illegal, so these purchases are not allowed on our systems.”
It is important to note that while the sale and use of marijuana and its subsidiary products are legal for medicinal use in 23 states—and recreational in certain states—this law is not federally upheld. Due to this discrepancy, many financial institutions nationwide have thus forbidden purchases via their users’ bank accounts.
The legalization of marijuana extends beyond the growth of the commercial industry to how equitable it is internally as well. Aspiring Black entrepreneurs in the cannabis industry face additional setbacks, such as acquiring capital to embark on their brand. This is further complicated by the racist history of the criminalization of marijuana, that still has an impact today.
However, cannabis companies are fighting back against the stigma against its widespread availability and use. Republican politicians have united in their opposition against any legislation to expand marijuana services for U.S. banks in the form of a bill named the SAFE Banking Act. Despite this, cannabis businesses are still making efforts to ensure their customers have financial accessibility, and that they are supporting diverse brands.
Darren Weiss, president of premium cannabis brand Verano, has encouraged weed enthusiasts to continue advocating for legalization, and 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 U.S.”
It is evident that Mastercard's recent decision has caused some disruption in the cannabis industry, and has made it more difficult for the industry to gain legal recognition by U.S. banks and financial corporations. However, the industry is still fighting for its widespread availability and use, and those in favor of its legalization are continuing to advocate for reform.
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