Mastercard Blocks Marijuana Purchases On Debit Cards

"The federal government considers cannabis sales illegal."
LAS VEGAS, NV - JULY 01: A customer pays for cannabis products at Essence Vegas Cannabis Dispensary after the start of recreational marijuana sales began on July 1, 2017 in Las Vegas, Nevada. Nevada joins seven other states allowing recreational marijuana use and becomes the first of four states that voted to legalize recreational sales in November's election to allow dispensaries to sell cannabis for recreational use to anyone over 21. (Photo by Ethan Miller/Getty Images)
Ethan Miller/Getty Images

Mastercard has told banks to stop allowing people to buy marijuana with its debit cards, citing that marijuana is still illegal under federal law.

The credit card company said this week that it recently became aware of people using Mastercard debit cards to buy pot and quickly contacted banks to tell them to halt the practice.

“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,” a Mastercard spokesperson said Wednesday.

“The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems,” the spokesperson added.

Cannabis is still illegal under federal law even though 38 states have legalized medical marijuana and 23 states have legalized its recreational use. Washington, D.C. has also legalized both uses.

Most banks in the country do not service marijuana companies for the same reason Mastercard cited, the illegality on the federal level. However, some pot buyers and sellers had found a loophole involving making PIN transactions using debit cards.

Marijuana companies were quick to condemn Mastercard’s decision.

“This move is another blow to the state-legal cannabis industry and patients/consumers who want to access this budding category,” said Sunburn Cannabis CEO Brady Cobb in a statement.

“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.,” said marijuana firm Verano’s president Darren Weiss.


The marijuana industry is already struggling despite increased legalization. New York in particular has seen dismal profits since legalizing the drug for recreational use.

New York City expected to pull in $56 million in tax revenue in its first year of legal weed, but instead is losing millions from anemic legal marijuana sales while an illegal market thrives. Only 15 dispensaries are currently up and running in the state, but New York City alone has hundreds of illegal pot dealers that operate under the radar of the state regulators. By June, the state had raised only $16.5 million in retail revenue since opening its first legal dispensary in December, a report backed by medical marijuana operators showed.

In Canada, cannabis was legalized nationally in 2018, so customers are often allowed to make payments with credit or debit cards.

Support for legalizing marijuana has spiked over the last two decades, with most Americans now saying they support legalizing marijuana for both medical and recreational use. About 88% of Americans support legal pot for medical use, and 59% support legal recreational use, according to an October Pew Research Center survey.

Despite the increasing legalization of marijuana, the drug still has its critics.

Scientific research has linked marijuana to a host of problems, including anxiety, memory problems, lung issues, and even psychosis. Weed has been linked to schizophrenia, especially in people who are genetically predisposed to developing it, according to several studies. One study showed the THC in cannabis makes schizophrenia and psychosis symptoms worse and causes more relapses and hospitalizations.

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